EUR/USD continues to trade above the two key hourly moving averages
And that signals that near-term price bias in the pair is more bullish. Despite worries about Italy, the euro is performing admirably against the dollar since overnight trading and that owes to the fact that the dollar is not being bid despite the fact that we're seeing risk off sentiment hit markets.
The lack of appeal for the dollar is causing a bit of rethink to the pair at this point in time as without the flows coming in from haven bids, it counteracts the negative backdrop from Italy and that makes trading the pair a little more tricky.
In terms of technical levels, the near-term bias appears more bullish but maintains limited as buyers are unable to stretch gains beyond 1.1570 at this point.
I would still argue for selling the rallies in the pair as long as Italy continues to weigh in but a move towards 1.1600 will start to change that dynamic a little bit. If buyers are able to find a way past the figure level and test the 100-bar MA (red line) and 200-bar MA (blue line) on the 4-hourly chart, it calls for a rethink in price bias for the pair.
Of note, the 100-day MA sits at 1.1629 and that will be the key level in determining whether or not the price action here is a bit of a correction or more of a rebound. The lack of appeal in the dollar during a time like this certainly presents an unwelcome conundrum in an otherwise straightforward trade for the pair. But at the same time, that's the beauty of markets. It's just never that easy.
Support
- 1.1522 (200-hour MA)
- 1.1500-04 (bids, 100-hour MA)
- 1.1465-70 (swing region)
- 1.1432 (week's low)
Resistance
- 1.1570-80 (swing region, 38.2 retracement level on H4)
- 1.1600 (offers, swing region)
- 1.1618-26 (100-bar MA and 200-bar MA on H4)
- 1.1629 (100-day MA)
