Battle Lines Drawn as Euro Divergence Comes Into Play
|S1: 1.1875||R1: 1.2000|
|S2: 1.1750||R2: 1.2075|
|S3: 1.1460||R3: 1.2250|
The open of the week saw the EURUSD fall from its recent highs, and that trend has continued over the last 48 hours. The strength of the US Dollar has continued, and with the proposed sanctions against North Korea passed unanimously, the reaction to the decision by the North’s leaders may see volatility return the EURUSD in the coming days.
The trend line that has been in place since June officially broke down in yesterday’s trading, with the daily candle closing below. The 15-minute chart displayed above shows a small double bottom, which is being confirmed by some divergence on the stochastic oscillator. This same level is also at the first key support zone of 1.1875, which may strengthen its case to start a move long.
Traders should be on the lookout for Crude Oil Inventories, Core CPI data and Unemployment Claims in the US released tonight, with the US Retail Sales numbers tomorrow. Traders should also consider the impact of the US stock market making new all-time highs, as the US Dollar strength and this important market seem to be correlating recently.