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Euro Technical Analysis – EUR/USD, EUR/CHF. Euro Bounces Off Lows

Euro, EUR/USD, EUR/CHF – Talking points

  • EUR/USD saw significant moves last week, but momentum remains
  • EUR/CHFrallied last week after some technical signals emerged
  • Bearish momentum may have paused, will it re-emerge for the Euro?

EUR/USD TECHNICAL OUTLOOK

After making a 2-year low at 1.08062 last week, EURUSD whipsawed back above 1.1100 before collapsing under 1.0900 again.

The aggressive moves saw the price cut back above the 10-day simple moving average (SMA) but not above the 21, 55 and 100-day SMAs. This may indicate that short term choppiness and volatility was unable to overcome underlying bearish momentum.

A bearish triple moving average (TMA) formation requires the price to be below the short term SMA, the latter to be below the medium term SMA and the medium term SMA to be below the long term SMA. All SMAs also need to have a negative gradient.

Looking at the 10-, 21-, 55- and 100-day SMAs, the criteria for a TMA has been met. A sustained move above the 10-day SMA would question the bearishness.

Resistance could be at the pivot points and previous highs of 1.11065, 1.11212, 1.12743 and 1.12802 while support might be at the recent low of 1.08062.

EURUSD CHART

Chart Created in TradingView

EUR/CHF TECHNICAL ANALYSIS

EURCHF bounced back after making a 7-year low last week, but fell just short of the 21-day simple moving average (SMA)

The 21-day SMA is currently intersecting at 1.02982 which is very close to a pivot point and previous high of 1.03001 and 1.03028 respectively. This might be a resistance zone to watch.

Other potential resistance levels could be the pivot points of 1.02790, 1.03266 and 1.05117 as well the February peak of 1.06091.

On the move down, it broke below the lower 21-day simple moving average (SMA) basedBollinger Band.The first close back inside also created a Spinning Top candlestick, which can sometimes be a reversal signal. In this case, the price kept moving lower and this highlights the need for robust risk management techniques.

The second time that EURCHF moved below the lower Bollinger Band, it once again formed a Spinning Top candlestick. The next day it closed back inside the band and then rallied.

Support might be at the 10-day SMA or the recent low at 0.99728.

EURCHF CHART

Chart Created in TradingView

— Written by Daniel McCarthy, Strategist for DailyFX.com

To contact Daniel, use the comments section below or @DanMcCathyFX on Twitter