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Fan Yang

EUR/USD - Projecting a Bullish Correction

This week the EUR/USD made its first meaningful bullish correction attempt since falling from the 1.3993 high on the year. The fact that we got a strong NFP last Friday suggests that USD is exhausted because the initial USD-positive reaction across the board has been completely reversed. 

For EUR/USD, not only did it reversed into price levels before the NFP, it has broken the 1.27 handle which opens up further bullish correction outlook for the short-term.

EUR/USD Daily Chart 10.9(click to enlarge)

When should we expect resistance? We can see some factors starting at 1.29, where we have a support/resistance pivot. What I want to focus on is the area between 1.30 and 1.3070, which involves:
1) A previous resistance pivot
2) The 50-day SMA
3) A falling trendline
4) 38.2% retracement

Furthermore, if price is approaching this resistance area while the daily RSI is around 60, we should anticipate sellers and a bearish outlook back to 1.27 if not back to 1.25.

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