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#1 25-03-2020 14:27:06

johnedward
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EUR/USD: is the decline already over? Key thresholds to watch today

EUR/USD: is the decline already over? Key thresholds to watch today (UOB)


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Today, the pair seems hesitant to continue its upward shift, after a solid day of rebounding on Tuesday.

Recalling that the pair advanced to a high of 1.0888 yesterday, the pair began to correct, marking a low of 1.0744 yesterday.

The EUR/USD managed to climb above the psychological threshold of 1.08, but appears to be struggling to continue its upward movement in today's trading.

Tuesday's rise was mainly a result of the correction of the greenback, which had been rising significantly in recent days. It should also be noted that the single currency ignored the historic drop in the EU's PMI indices for the month of March.

From a technical analysis standpoint, it is worth noting that the pair crossed its 100-hour moving average yesterday, before last night's correction brought the pair back to this threshold, which played a supporting role.

This threshold, at 1.0754, will therefore be considered to be a support level, after the psychological threshold of 1.08.

If the pair breaks below its 100-hour moving average level, the pair's profile will become more bearish. We will then watch for support lines at 1.07, 1.0650 and the annual low at 1.0635, as well as the psychological threshold at 1.06.

If, on the contrary, the pair shifts upward, yesterday's high, coupled with the psychological threshold of 1.09, and the 200-hour moving average at 1.0913 will form a key resistance zone.

If the pair manages to break above, the major psychological threshold of 1.10 will come into play.

However, the most likely scenario at the moment seems to be consolidation.

This is what the UOB bank predicts today in its technical analysis of the EUR/USD pair:

"We estimated on Tuesday that the euro's recovery could extend as far as 1.0879, but that the prospects for a sustained rise above that level were not very good. However, the EUR rose to 1.0887 before falling back to finish the day at 1.0786. Momentum indicators are beginning to stabilise, and as for now, the euro is expected to trade between 1.07 and 1.09."

Hourly EUR/USD chart

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