EUR/USD Daily Outlook
Daily Pivots: (S1) 1.1712; (P) 1.1755; (R1) 1.1785;
EUR/USD’s decline and break of 1.1723 minor support is the first signal that corrective rise from 1.1300 has completed. That came after meeting strong resistance from 38.2% retracement of 1.2555 to 1.1300 at 1.1779 as we expected. Intraday bias is turned back to the downside for 1.1525 support first. Break will confirm this bearish case and target a test on 1.1300 low. On the upside, again, sustained break of 1.1779 will dampen our view and extend the rise from 1.1300.
In the bigger picture, a medium term bottom should be in place at 1.1300, on bullish convergence condition in daily MACD and some consolidations would be seen. But still, note that EUR/USD was rejected by 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516. That carries some long term bearish implications. Thus, we’d expect fall from 1.2555 high to resume after consolidation completes. Below 1.1300 should send EUR/USD through 61.8% retracement of 1.0339 to 1.2555 at 1.1186. And, in that case, EUR/USD would head to retest 1.0339 (2017 low).
EUR/CHF Daily Outlook
Daily Pivots: (S1) 1.1319; (P) 1.1352; (R1) 1.1372;
EUR/CHF’s rebound lost momentum after hitting 1.1384 and retreated sharply from there. Intraday bias is turned neutral first. For now, another rise remains mildly in favor as long as 1.1221 support holds, break of 1.1384 will resume the rebound from 1.1178 and target 1.1452 resistance. Decisive break there should confirm near term reversal. That is, whole correction from 1.2004 has completed at 1.1178 after hitting 1.1154/98 key support zone. However, break of 1.1221 will turn focus back to 1.1154/98 key support zone.
In the bigger picture, for now, the price actions from 1.2004 medium term top is seen as a correction only. Downside should be contained by support zone of 1.1198 (2016 high) and 61.8% retracement of 1.0629 to 1.2004 at 1.1154 to complete it and bring rebound. This cluster level is in proximity to long term channel support (now at 1.1207) too. A break of 1.2 key resistance is still expected in the medium term long term. However, sustained break of the mentioned support zone will mark reversal of the long term trend. In that case, 1.0629 key support will be back into focus.
