EURUSD technical outlook

Key Resistance: 1.1616 (High of 3rd May)

Selling Zone: 1.12300; Broken trend line which turned into resistance

Minor Support: 1.09120; low of 24th June



Figure: EURUSD technical analysis, daily

The EURO has suffered huge drawdown against the mighty dollar in the event of a major economic news release on 24th June; 2016.The medium-term uptrend in the daily chart of the EURUSD pair tends to be at risk since the price has clearly broken the trend in the daily time frame. With the bearish crossover of the 100 days and 200 days, simple moving average and a decisive break of the trend line suggest the topping of the EURUSD at key resistance level 1.1616 (High of 3rd May).

Currently, the price is trading near the 200-day moving average on the daily chart suggesting that the minor retracement is in place after the massive fall of 24th June 2016.Current price action scenario argues against going short in this pair due to the  risk-reward ratio offered at this stage. We will look for selling opportunity near the trend line resistance at 1.12300.This place is going to offer significant resistance to the EURSD pair since the 100 day SMA  has confluence with the broken trend line creating a resistance zone.

If the short entry is triggered with price action confirmation near the trend line resistance, the first bearish target of the pair will be towards the support level of 1.09120; low of 24th June. A clear decisive break of the minor support level will bring further downside move of the pair towards the key support level at 1.0522; low of 3rd December 2015.Keeping the long term bearish trend in mind ,a valid break of the low of 3rd December 2015 will fuel up the pair in the southward to continue its bearish movement along with the long term bearish trend.

The price might exhibit a ranging movement between the 100 and 200 days moving average for the prolonged period of time until major economic news release which will refuel the pair with high volatility. Short time frame traders can take the advantage of the ranging movement of the pair and sell at minor retracement with proper risk reward ratio.

For the bullish scenario, the first obstacle for the pair is the broken trend line and the 100 days SMA. Without strong positive data of the EURO, it would be hard for the pair to rally up against the mighty dollar, overcoming the strong resistance at 1.12300; broken trend line  resistance. A valid break of the of the trend line resistance will shot the pair up to test the high of 3rd may 2016 .



If the pair manages to breach the key resistance at 1.1616 (High of 3rd May) ,medium term uptrend will be strongly established in the pair. A clear break of key resistance will lead the pair towards the weekly resistance at 1.14140, near the 100-day SMA in the weekly chart.