Will EUR/USD see a reversal?
Or, will the downtrend continue?
The euro has rebounded well against the dollar over the last week as risk appetite has modestly improved. But it’s already running into some trouble.
The pair has been in a long-term downtrend and we could soon see if that is set to continue. It has run into resistance around 1.1150, where prior support and resistance coincides with the 50 fib level – February highs to March lows.
This also coincides with the mid-point of the descending channel, which makes for an interesting potential rotation point, if the longer-term trend is going to continue.
A move above here doesn’t enormously change that, and only a break through the top of the channel strongly indicates a change of direction, even if that would initially be considered a correction.
Other resistance levels could be interesting in the interim, including 1.1230, where the 61.8 fib coincides with the 55/89-day SMA band.
But a rotation at the 50 fib could suggest that the trend remains strong a could signal more pain ahead for the pair.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
