EURUSD technical analysis, Fractals perspective


Some data reports within the week had investors concerned that the ECB will have to maintain its easy credit stance for longer than expected and the much-anticipated taper would have to be delayed. Let's take a look at the EURUSD technical analysis, Fractals perspective

31 March, AtoZForex – The euro has been under pressure so far this week with Monday as an exception. This was partly due to the poor data report from the region. Inflation rose less than expected in the month of March with German consumer prices rising by only 0.2%. This slowdown drove the year over year rate below the central bank's target to 1.6% from 2.2%. All measures from the Economic Confidence to the Business Climate and Industrial Confidence figures declined in the month of March. The news spurred concerns that the ECB will have to maintain its easy credit stance for longer than anticipated and that the much-expected taper would have to be delayed.

EUR has had an impressive retreat from Monday’s high in the 1.09 area to the low of 1.0671. Relative central bank policy is dominant and interest rate differentials widening in a EUR-negative manner at both the short– and longer-end of the curve. The narrative of central bank policy divergence is finding renewed strength on the back of recent comments from key Fed policymakers and some ECB sources, with the former highlighting upside risk to the Fed’s tightening path and the latter pushing back on expectations for near-term changes to the ECB’s accommodative stance. EUR should remain under pressure on the basis of relative central bank policy.

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EURUSD technical analysis, Fractals perspective; Daily outlook

EURUSD technical analysis EURUSD technical analysis, Fractals perspective

Prior to the recent high, we’ve had EURUSD tracked closely for possible momentum loss for a strike. This action was informed by the fractal model the EURO was drawing out. A rare map with a fantastic directional bias. Looking through the daily frame, the high of Tuesday was a gift as price pieced its 200-Day Moving Average and closed below it. The following day’s close was a confirmation indeed as a beautiful engulfing was spotted. We couldn’t have asked for a better confirmation in tandem with the fractals map drawn out.

Further weakness should be curtailed temporarily by its 100-Day MA (1.0620). A break of this level is needed to have further bearish run towards the 1.0510 handle.

EURUSD technical analysis, Fractals perspective; weekly outlook

EURUSD technical analysis, Fractals perspective EURUSD technical analysis, Fractals perspective

From the weekly frame, if this fractal model is correct, weakness towards 1.0620 down to 1.0510 should be seen as an opportunity to get on the bulls boat. However, a breach of 1.0500 should invalidate bullish bias. 1.1050 remains the weekly targets if our mentioned supports remain unbreached.

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