EURUSD may Retest 1.1075 again for Bearish Continuation with target towards 1.0920. After the ECB meeting, EURO lost significant momentum against USD. Let’s check EURUSD Technical Analysis for more levels and insights.
January 27, 2020 | AtoZMarkets.com – EURUSD has been non-volatile and impulsive with the Bearish Momentum since it broke below 1.1075 area. The Bearish Trend continued impulsively after the ECB Meeting leading the price to reside at the edge of 1.1020 area.
Ahead of FED Monetary Policy Meeting this week, EURO is currently struggling to break higher. Moreover, EURO is under pressure after the Dovish outcome from ECB last week. EURO volatility also fell to record low last week leading market participants to divert. As ECB is set to persist with negative rates throughout the year, EURO may struggle further in the process.
EURUSD fell around 19% last week ahead of FED event this week. The Federal Reserve Fund Rate may remain unchanged at 1.75% this week. Currently USD may lose certain momentum ahead of the FED event but in the long-run USD may continue stronger against EURO.
EURUSD to break above declining Price Channel
After breaking below 1.1075 area recently, EURUSD formed Declining Price Channel along the way. The price is currently residing around 1.1020 area from where it may push higher towards 1.1050 to 1.1075 resistance area.
According to 1 hour Chart, certain MACD Bullish Divergence formed along the way down but could not push the price higher earlier. The price has bounced off the Channel Support for several times and currently starting to show some bullish pressure.
image: EURUSD 1 Hour Chart
The Bearish Trend in process currently is having confluence from the dynamic levels. As per 1 hour chart, there are certain resistances along the way towards 1.1075 resistance area. The Resistances are the Channel Resistance and Dynamic level resistances of 20 EMA, Tenkan, Kijun and wider Kumo Cloud. As the price push higher, these resistance may hold the price resulting in certain corrections and volatility in the process.
EURUSD to Retest 1.1075 as Resistance
image: EURUSD Daily Chart
EURUSD has been struggling to break below 1.1075 area since it broke above on November 2019. The price bounced off the level and formed certain Bullish pressure along the way. Recently, after the price managed to break below 1.1075 area with a daily close along with the Trend Line support, the Bears continued their run with target towards 1.0920 area.
Today, the price started slow with the Bearish Momentum which may lead the price higher towards 1.0750. Before the price continues it’s Bearish trend run, it is very important to have a retest for validating the longevity of the upcoming Bearish pressure. Moreover, as the EURUSD Head and Shoulder Pattern is validated after the break, so a retest off the Neckline i.e. 1.1075 area will validate the pattern better. Though there are no certain Bullish Divergence to act as confluence, slower Bearish Pressure and Mean Reversion higher may play a vital role in the process. As EURUSD retests 1.1075 area successfully, the Bearish Continuation will lead the price to 1.0920 or lower.
To Conclude, EURUSD being in a strong Bearish Trend may push higher towards 1.1075 area as retracement, which will support further Bearish Pressure in the long run with target towards 1.0920.