EURUSD slightly strengthened its position: Are Bulls in play?

On Wednesday the EURUSD slightly strengthened its position, but positive data on the housing market in the US stopped the pair’s growth and brought it to the key support levels. Which direction will the pair go further? 

27 October, AtoZForex – Yesterday, the weak consumer confidence in the strength of economic growth in Germany did not affect the Euro’s recovery momentum. Instead, EURUSD broke above the resistance at 1.090 level. During the Asian session today, the euro inched up.

At the start of European session the growth of EUR accelerated, and EURUSD rushed up to full speed. In the afternoon the bulls’ grip slightly weakened, and EURUSD fell lightly. However, right after the American trading started, our pair flew up and broke the 1.09464 level. Nevertheless, the buyers’ pressure was not enough to continue the growth, due to positive fundamental releases from the US. According to the US Commerce Department, sales in the primary housing market in September 2016 increased by 3.1% compared to August, though, the expectation was -1.0%.

The long-term upward dynamics of the US dollar upswing is solely due to expectations of Fed’s rate hike.

EURUSD Technical analysis:

EURUSD 4h-chart EURUSD 4h-chart (Click to zoom in)

  • According to SMA based analysis, currently, the short position is more relevant due to the pair has been trading below the moving averages 50, 100 and 200.
  • The MACD histogram is in the negative zone and above its signal line, continues to rise gradually and provides a buy signal for the Euro.
  • We have the same buy signal from the Stochastic Oscillator, as the% K line rises above the% V.

Yesterday’s bulls entrenched above 1.090, and today their first goal will be to return to the strong resistance 1.095 level. Only the breakdown of this level would lead to the formation of a new major upward movement with the goal at 1.098 and 1.100 levels. Otherwise, the pair will be again treated in a narrow channel between 1.0934 – 1.0865 levels.

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