Euro Talking Points
EUR / USD appears to have failed in its attempt to test the annual trough (1.0636), and the exchange rate may face fork conditions during the Easter holidays, as it interrupts the series of carry-overs and lows carried over from the previous week
Technical forecasts for the euro: neutral
TThe monthly opening range was a key dynamic for EUR / USD in the fourth quarter of 2019, with the exchange rate reaching a major low on October 1, the highest in November having occurred during the first full week of month, while the lowest for December arrived on the first day of the month.
The opening range for 2020 showed a similar scenario, as the EUR / USD marked the month’s high on January 2, with the exchange rate having reached its February high on the first trading day of the month. However, the opening range for March was less relevant in the context of renewed volatility, the decline from the annual peak (1.1495) producing a break from the February low (1.0778), the rate of exchange rate sliding towards a new low of 2020 (1.0636).
Nevertheless, the 50-day SMA (1.0971) and the 200-day SMA (1.1062) have bearish prospects for EUR / USD as the two moving averages follow a negative slope, but the exchange rate seems to reverse the course before the annual low (1.0636) as it breaks the previous week’s series of highs and lows.
EUR / USD daily rate chart
Source: Negotiation view
TThe recent recovery of the EUR / USD takes place after the series of failed attempts to close above the 1.1140 region (78.6% expansion), but the exchange rate appears to have marked an unsuccessful attempt to test the lowest annual (1.0636) in a context of lack of dynamism. to break / close below 1.0780 area (100% expansion).
In turn, EUR / USD could face range conditions in the coming days, with movement above the Fibonacci overlap around 1.0830 (78.6% expansion) at 1 , 0860 (23.6% retracement) opening 1.0950 (100% expansion) to 1.0980 (78.6% retracement).
The next area of interest is around 1.1040 (61.8% expansion), followed by the handful of 1.1100 (78.6% expansion).
— Written by David Song, Currency Strategist
Follow me on Twitter at @DavidJSong