Euro, EUR/USD, US Dollar, EUR/JPY, Trend Breakout, Candlestick, Bollinger Bands – Talking Points
- EUR Bulls were rewarded early last week before a pullback surfaced
- Technical setup from recent rally could bring euro bears back into the fray
- For now, a higher squeeze appears to have been rejected.intention euro/usd Will it be lower?
Recommended by Daniel McCarthy
Get free euro predictions
EUR/USD technical analysis
EUR/USD has cleanly broken out of the top of the downtrend channel that started last week, briefly breaking through the small resistance around 1.0680 and hitting a high of 1.0695.
The price action on the day the price reached that high showed a bearish engulfing candlestick
Formations appeared and then subsided over the next few days.
A bearish engulfing candlestick begins at or above the closing price of the previous candlestick. The bearish candle length “swallows” the previous green candle and then closes below the opening price of the previous candle.
This reversal could indicate that the downtrend may re-emerge.
The recent rally has broken above the upper band based on the 21-day simple moving average (SMA). bollinger bands. On the same day that the engulfing candlestick materialized, the price closed within the band.
This could add weight to the view that a reversal is possible.
A bearish triple moving average (TMA) formation requires the price to be below the short-term SMA, the medium-term SMA to be below the medium-term SMA, and the medium-term SMA to be below the long-term SMA. All SMAs must also have negative slopes.
Looking at the combination of the 21-day, 34-day, 55-day, and 100-day SMAs could suggest that the TMA criteria is met and bearish momentum is developing.
On the downside, nearby support could be near previous lows and breakpoints in the 1.0480-1.0495 area, ahead of the lows around 1.0445 seen in December 2022 and October 2023 .
On the upside, the 55-day SMA is currently near its recent peak, with a possible resistance zone beyond 1.0700.
The next resistance levels are likely to be at breakpoints and previous highs around 1.0740, 1.0770, 1.0835, and 1.0945, before a cluster zone of potential resistance in the 1.1075 – 1.1100 area.
EUR/USD daily chart
Chart created with TradingView
EUR/JPY technical analysis
EUR/JPY appears to have settled into its recent range after rejecting gains last week when it traded above August and at its highest since 2008.
In the above discussion, it appears that EUR/USD is forming a bearish TMA, but looking at the simple moving average (SMA) of EUR/JPY, a bullish TMA may appear if the price rises a little. there is.
A hindering factor is the clustering of the 21-day, 34-day, and 55-day SMAs. If the price remains above these SMAs, the conditions of his bullish TMA pattern may be triggered.
On the downside, support could be at the breakpoint and recent lows towards 156.50. In case of a sustained decline, the levels to watch may be at the previous lows and breakpoints of 154.39, 153.45, 151.60, 151.40, and 151.07.
On the upside, recent highs and breakpoints near 159.50, 159.75, and 159.90 could provide resistance.
EUR/JPY daily chart
Chart created with TradingView
Trade Smarter – Sign up for the DailyFX Newsletter
Receive timely and compelling market commentary from the DailyFX team
subscribe to newsletter
— Written by Daniel McCarthy, DailyFX.com Strategist
To contact Daniel, use the comments section below or @DanMcCathyFX on Twitter
