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EUR/USD Today Technical Report 05/05/2016


EUR/USD tried to moved higher yesterday but it hit resistance at 1.1530 (R2) and then it retreated to trade virtually unchanged slightly below the 1.1500 (R1) line. The short-term picture still looks somewhat positive and as a result, I would expect the bulls to regain momentum at some point and drive the battle back above 1.1500 (R1). A break above 1.1530 (R2) could prompt extensions for another test at 1.1620 (R3). For now though, our short-term momentum indicators give evidence that further retreat is possible before buyers decide to pull the trigger again, perhaps to challenge the 1.1440 (S1) zone as a support this time. The RSI exited its above-70 zone and is now headed towards its 50 line, while the MACD, although positive, has topped and fallen below its trigger line. Switching to the daily chart, I see that Monday’s close above 1.1500 (R1) has probably signaled the exit of the sideways range the pair had been trading between that obstacle and the 1.0800 key zone. However, given that the pair is back below 1.1500 (R1), I prefer to wait for another move above that obstacle before I get confident for further advances.



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