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The Euro struggled during this week and fell lower below the 1.2200 support area against the US dollar. However, it looks like the market is taking advantage of low liquidity due to holidays and trying to take the EURUSD pair higher. This is very tough considering the recent FX market sentiment. We need to see how the pair trades during the coming week. There is no economic release today due to the Boxing Day holiday. Let’s see whether the pair can continue trading higher in the near term or not.
There is a bearish trend line formed on the hourly chart of the EURUSD pair, which was just breached earlier but failed to successfully close above the same. We need to keep an eye on the mentioned trend line as the pair is making an attempt to clear it one more time. The pair also failed around the 23.6% fib retracement level of the last drop from the 1.2352 high to 1.2165 low. There is one important bullish sign developing on the hourly chart as the RSI is trying to close above the 50 level. If it happens then the EURUSD pair might head towards the 100 hour moving average.
If the Euro buyers fail to take the pair higher in the near term, and EURUSD moves lower, then it might head back towards the last low. The 1.2160-50 must hold for today and can be tested on the coming Monday.
Overall, one might consider selling rallies as long as the price is below the 100 hour MA.