EUR/USD sneaks below monthly PP
As it was projected yesterday, an attempt of the currency exchange rate to reach the 1.1866 level was neutralized by the slipping 55-hour SMA. Accordingly, the Dollar continued to appreciate against the Euro. The only difference is that this downward movement led to transformation of a descending channel into the falling wedge formation. The new pattern presupposes an upcoming rebound, which might happen once the pair will reach the 38.2% Fibonacci retracement level located at 1.1760.
However, even in case this scenario materializes the surge might not last for long due to pressure of three moving averages. In addition to that, the northern side is covered by the support-turned-resistance monthly PP at 1.1806. There is also a need to take into account the fundamental factor, which might break the pattern and continue pushing the pair to the bottom.
As it was projected yesterday, an attempt of the currency exchange rate to reach the 1.1866 level was neutralized by the slipping 55-hour SMA. Accordingly, the Dollar continued to appreciate against the Euro. The only difference is that this downward movement led to transformation of a descending channel into the falling wedge formation. The new pattern presupposes an upcoming rebound, which might happen once the pair will reach the 38.2% Fibonacci retracement level located at 1.1760.
However, even in case this scenario materializes the surge might not last for long due to pressure of three moving averages. In addition to that, the northern side is covered by the support-turned-resistance monthly PP at 1.1806. There is also a need to take into account the fundamental factor, which might break the pattern and continue pushing the pair to the bottom.
In result of the previous trading session the currency exchange rate has expectedly reached the 38.2% Fibonacci retracement level located at 1.1760. As the pair is also moving in a junior falling wedge formation, a breakout in northern direction is expected to happen. This projection is additionally supported by the fact that the above retracement level coincides with the bottom boundary of a larger descending channel.
If the breakout happens, the surge is likely to last until the currency rate will reach the 55-hour SMA or the monthly PP at 1.1807. However, a release of better than expected US employment data might alter this scenario and push the rate straight to alleged support zone located between the 1.1730 and 1.1720 marks.