- EURUSD responds to critical support confluence 1.0954/64
- Key range-break between 100 & 200 DMAs to validate near-term directional bias
- Updated targets & invalidation levels
Chart Created Using FXCM Marketscope 2.0
Technical Outlook: EURUSD is rebounding off a key support confluence at 1.0954/64 where the 100-day moving average converges on the 61.8% retracement of the 2016 range and former trendline resistance turned support. Key near-term resistance stands at the confluence of the 61.8% retracement of the 2016 trading range and the 200-day moving average at 1.1045. We’ll be looking for a break of this range with a general long side favored eyeing targets at 1.1120 & 1.1253/63.
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Notes: The pair broke above the upper median-line parallel of an embedded pitchfork extending off the monthly highs yesterday with the advance holding just below near-term resistance at 1.1045/55. A breach higher targets the 2/8 low at 1.1085 backed by confluence resistance into 1.1116/20. A breach above this level is needed to validate a more meanigful advance targeting subsequent resistance objectives at 1.1165 & 1.1192.
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Interim support rests at 1.10-handle backed by key support & bullish invalidation at 1.0954/64. A break below the December high-day reversal close at 1.0924 is needed to put the broader down-trend back in focus targeting the 2016 open at 1.0872 and the monthly open at 1.0830. A quarter of the daily average true range yields profit targets of 28-31pips per scalp. Caution is warranted heading into the close of the week with the second read on U.S. 4Q GDP
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Check out SSI to see how retail crowds are positioned as well as open interest heading into February trade.
Relevant Data Releases
Other Setups in Play:
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—Written by Michael Boutros, Currency Strategist with DailyFX