EUR/USD: Resistance affirmed, downside retracement forming - Westpac

Daily momentum has fallen into potential areas of extension, but are also showing signs of divergence/support for EUR, according to Tim Riddell, Research Analyst at Westpac.

Key Quotes

“Rebounds off the broad 38.2% retracement level of 1.1710 are unconvincing so far and need to break above 1.1850-80 to suggest a period of consolidation”

“Weekly

Weekly momentum shows no sign of turning, in fact weekly indicators are more indicative of an extending (down) trend for EUR/USD

Critical for the potential of an extending move will be how tightly rebounds are contained. A slide below 1.1700 could see a swift extension to 1.1450 (50%)”

“Monthly

• RSI’s have led a relatively compelling turn in monthly indicators which, though still to be confirmed, should lead to deep retracements of the rally since early-2017
• Interim rebounds are unlikely to alter the turn in patterns that have developed in monthly charts. This should lead to slippage toward the 1.12 area through 2018, though this should still be viewed in the context of a broad consolidation”