EURUSD Heading to the Bottom of the Channel
Price action
The EURUSD pair has been making lower highs and lows in the daily and 4H charts. On the 4H chart, we see that the price is moving near the -2 Bollinger line. Then, today it has crossed recent hourly supports (1.1325).
MACD
The MACD is decidedly bearish, although not oversold.
Bearish scenario
A short position when the pair breaks down its 1.13 key level and its recent 4H high as invalidation level would result in a reward factor of 1.91 with a target at 1.12. We could add to the position if the 1.12 key level is pierced as well with a second target at 1.11350
Bullish scenario
It may happen, the 1.13 key support might hold. If that is the case, and the upper channel trend line is pierced, the pair may start a new leg up to test the 1.1480 key resistance level.
We must confirm this scenario by confirming a change in the Dollar index trend.
Fundamentals
The EURO has currently two stressors: The Brexit deal and Italy’s budgetary misunderstanding with Brussels. As long as these issues remain unsolved, we expect a continuation of the current bearish price movements. But we should keep an eye on them as it may change the overall picture of this pair.
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