Technical Update - EURUSD rebound seems to reverse testing support. Dollar Index finding solid ground and rebounds
Kim Cramer Larsson
Technical Analyst, Saxo Bank
EURUSD spiked higher but couldn’t stay up. Sellers are back in control. 1.02 to be tested. 1.01 is key support
Dollar index finding support rebounding strongly. 110 is key level
EURUSD the 200 daily SMA was too much of a resistance for EURUSD to close above despite spiking to 1.05 and closing above resistance at 1.0370. The strong rebound seems to fizzle and EURUSD is testing the upper trendline in the rising channel it broke bullish out of a week ago.
If EURUSD closes back below 1.02 a drop to 1.01 seems likely. A sell-off back down to parity is not out of the question.
It is interesting that almost all Fibonacci retracement levels coincide regardless of measuring from the September or just from the latest move up. That gives the levels more strength.
For EURUSD to extend the current uptrend a close above 1.0482 is needed. An indication of this scenario to play out would be if EURUSD closes back above 1.0370.
The Dollar Index seems to have found support around 160.21. Spiking down bears have tried to push the Dollar index to next key support at 105.52 but has failed with the Dollar Index bouncing from just above 105.
RSI is still showing negative sentiment so it remains to be seen whether this is just a rebound correction or a trend change back to bullish.
However, a rebound to 109.10 (100 SMA and 0.50 retracement) but a move the 0.618 retracement at 110 and a test of the rising trendline should be expected.
If RSI closes above its upper falling trendline it will be an indication of a trend change. A close above 60 will confirm that.
An Dollar Index close above 110.89 will reverse the current downtrend.
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