EURUSD Buyers are regaining momentum as the price is moving lower with a corrective momentum. After breaking below the neckline of the potential Head and Shoulder pattern, the price moved to the neckline with an impulsive pressure. Let’s check EURUSD Technical Analysis for more levels and insights.
February 4, 2020 | AtoZMarkets.com – EURUSD buyers managed to regain strength after having a daily close above 1.1075. Moreover, the price had a daily close above the dynamic levels, indicating that buyers are regaining momentum. However, the current correction towards the downside may indicate that the buyers may regain momentum to bring the price above the 1.1150 area.
The Eurozone’s economic outlook is not quite satisfactory except for the manufacturing and export sectors. However, positive developments in the industry and construction sectors are indicating that the Eurozone is regaining its momentum. Despite the Q4 GDP, consumer confidence and in the service sectors were also stable during the time. Overall, there is no clear direction that the overall outlook has started to remain bullish.
On the other hand, the US labor market has shown some tension in the labor market lately. The real wage growth declined substantially with the JOLTS, that is indicating a slowdown of overall employment growth.
EURUSD Buyers May Intervene the Market Again
After having a strong daily close on Friday, EURUSD showed a bearish pressure on Monday. However, the price action of the bearish pressure is not satisfactory to say that the price is likely to retest the 1.10 area again.
According to the 4-hour chart, the price has got a rejection from the dynamic level of 20 EMA and Kijun Sen yesterday. Moreover, today after the London opening, the price tested the 20 EMA again. Currently, the price is moving higher, indicating that sellers are deactivating their interventions and buyers are regaining momentum.
In addition to that, the MACD is on a neutral zone while being on the verge of having a Bullish cross. As there is no sign of Bearish Divergence along the way, there is no sign of Bearish intervention. Therefore, the current EURUSD Bullish momentum may lead the price to move higher towards 1.1160 in the coming days.
EURUSD May Test the 1.1160 Area Again
There was a potential head and shoulder pattern in the EURUSD daily chart, however, the current price action does not have enough pressure to reject the neckline. Therefore, there is a higher possibility that the price will test the recent resistance of 1.1160, where the shoulder stays. As per the price structure, the price needs to close below the 1.10 area to remain under the control of sellers.
To conclude, as per the current price action, EURUSD buyers are regaining momentum. Therefore, they may push the price higher towards the 1.1160 area in the coming days.