Short-term technical outlook on EUR/USD
Key technical elements
- As seen from its 1 hour chart, the EUR/USD has staged a bearish breakdown from a minor bearish reversal chart configuration, “Head & Shoulder” in yesterday, 17 Jan U.S. session.
- In today, 18 Jan Asian session and into the opening of the European, the pair has shaped a rebound to retest the neckline of the aforementioned “Head & Shoulder” now turns into an intermediate resistance at 1.2217. Interestingly, price action has formed a series of hourly “Doji” candlesticks pattern at the 1.2217 level which suggests indecisiveness.
- The next significant short-term support rests at the 1.2090/2070 zone which is defined by the former minor swing high area of 02/04 Jan 2018, a Fibonacci cluster and the exit potential of the minor “Head & Shoulders” bearish breakout.
- The key short-term resistance stands at 1.2305.
Key levels (1 to 3 days)
Intermediate resistance: 1.2217
Pivot (key resistance): 1.2305
Supports: 1.2120 & 1.2090/2070
Next resistances: 1.2380/2415
Therefore, as long as the 1.2305 key short-term pivotal resistance is not surpassed, the EUR/USD may see a further minor corrective down move to target the next near-term supports at 1.2120 follow by 1.2090/2070 next.
However, a clearance above 1.2305 should invalidate the minor corrective decline scenario for an extension of the rally towards the next resistance at 1.2380/2415 (upper boundary of a major ascending channel from 03 Jan 2017).
Chart is from eSignal
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