The EURUSD is seeing a modest rebound today after sharp declines yesterday, driven in part by a stronger USD following news of US-China tariff reductions (set for a 90-day period at least). The move lower on Monday found buyers just ahead of the 38.2% retracement of the January–April rally at 1.10395 — a level that remains a critical support line.
A break below that 38.2% level would signal a deeper corrective move is underway, shifting the bias further to the downside.
The pair is moving higher helped by the CPI data which was more modest than expectations (0.2% vs 0.3% for the headline and the core measures). There has been a modest move higher with the pair trading to a new high at 1.11349.
On the topside technically, the pair now eyes the April 3 swing high at 1.11452. A sustained move above this level would tilt the bias more bullish and target the next resistance zone, which includes:
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The 200-bar MA (4H) currently near 1.1200
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A swing area up to 1.1213
For now, the bounce is corrective, but traders will be watching whether the pair can push through key resistance or fall back toward the retracement level to confirm trend direction.
Technical Summary:
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Support: 1.10395 (38.2% retracement)
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Resistance: 1.11452 (Apr 3 swing), 1.1200–1.1213 (MA/swing zone and the 200 bar MA on the 4-hour chart)
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Bias: Neutral near-term; bearish below 1.10395, more bullish above 1.11452
This article was written by Greg Michalowski at www.forexlive.com.