The Euro declined moderately last week after the strong gains in the first week of this month. This Wednesday will be an important day for the pair because the FOMC meeting will take place. We will probably witness a thin market till Wednesday as traders will wait for the event to unfold.
Also, keep in mind the “Brexit” referendum in the UK on June 23rd. The result can have a big impact on the euro currency as well and with that on the EURUSD pair.
The situation is not entirely clear at the moment. Waiting seems like the best strategy until we get some chart patterns or some better levels to enter the market.
The technical picture is bullish for the pair on both the daily and weekly timeframes, and headed to the 1.17 – 1.18 area. So, it will be best to look for buying opportunities on the shorter timeframes.
We can better see the support levels on this chart. The pair went through the monthly and weekly middle pivot points last week. Now, the first stronger support lies right below current levels, at the 61.8% Fibonacci retracement (1.1218) of the whole move up. Also, the 100 – day moving average (1.1211) is very close to this level (see daily chart).
There is a good chance that the move down will be stopped at this 1.1211 – 1.1218 zone. If however the market breaks it then the next stronger support zone is the lower trendline of the channel at the 1.1150 area. This area must hold in order for this uptrend and the bullish channel on the daily timeframe to remain valid. In case the lower trendline of the channel falls then that would be a complete bearish reversal.
The red line here is the 25-period simple moving average, which often held price on the hourly chart. There is not much going on the hourly chart at the moment however it will be best to keep an eye on it and wait for some reversal patterns to show up, preferably close to the levels on the 4h chart.
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