EURUSD: testing the previous resistance as a support

Previous:

On Tuesday the 26th of February, trading on the EURUSD pair closed up. The British pound had a positive influence on the majors during the European session.

The pair was trading below the 1.1370 resistance up until Federal Reserve Chair Jerome Powell’s address to the Senate Committee on Banking. Powell spelled out the regulator’s wait-and-see stance, stating that the Fed has a generally positive economic outlook, and that the main risk posed to the US economy is slowed economic growth overseas. The Fed’s top management will continue to be patient in making decisions with regard to raising interest rates.

Before closing the day, the EURUSD pair tested 1.14.

Day’s news (GMT+3):

  • 11:30 Eurozone: ECB’s Cœuré speech.
  • 12:00 Switzerland: ZEW survey – expectations (Feb).
  • 12:00 Eurozone: M3 money supply (Jan), private loans (Jan).
  • 13:00 Eurozone: consumer confidence (Feb), economic sentiment indicator (Feb), industrial confidence (Feb), business climate (Feb).
  • 13:00 Germany: German Buba President Weidmann speech.
  • 16:30 Canada: CPI (Jan).
  • 18:00 US: pending home sales (Jan), factory orders (Dec).
  • 18:30 US: EIA crude oil stocks change (18 Feb).
EURUSD H1

Current situation:

The pound, the euro crosses, and Powell prevented the bears from reaching the support zone at 1.1315/20. We got a drop to 1.1345 in the US session, but buyers then quickly recovered those losses. The 45th degree and the 1.1370 mark were broken through by the bulls. The euro reached the 1.1403 mark. The pair started a correction from the 67th degree, which extended to 1.1373 in the Asian session.

The pair is currently trading around the 1.1370 support, which was a resistance during yesterday’s trading. Considering that trading robots are providing volume across all markets, there’s a high likelihood that the pair will test the LB balance line before starting to rise again. Take a look at previous tests; the rate has descended to the line before rebounding sharply upwards.

The trend line runs through 1.1360. This should bolster the support zone. The stochastic has reversed upwards. All that’s left is for the crosses to reverse and we can set our sights on 1.1416.

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