EURUSD Analysis – 200 Day SMA Support Broken As Dollar Extends Recent Gains
- EURUSD 6th November Analysis – Forex FX 4X- Bearish momentum from last Friday has carried into the new trading week, with the euro dropping close to a two-month low versus the U.S. dollar, pushing below the 200 day SMA. Market participants are now waiting for clarity around the U.S. elections and a Greek reform vote which has weighed on the single currency today with a current loss of 0.20% experienced for the EURUSD.
- The break below range support lows did not meet with major volatility but steady safe-haven flows into the greenback came as the fundamental backdrop in Europe remains a key focus. Our weekend EURUSD update highlighted the fact that the EURUSD line chart had already breached support on the closing basis and the downside has continued today.
- The euro is now trading at a key area and as ever there are levels in close proximity which could yet play a part in the near term price action. First of all, the June resistance highs are closely aligned with the September 11th low around $1.2750 and the 38.2% retrace of the last swing higher is likewise closely located around $1.2740.
- The fact that price has broken under major support lows could see the euro cut straight through this next level to the downside but the corrective risk is for a reversion to the recent trading range. With this in mind we will be looking for a strong price action confirmation setup to gain a directional bias. Price is currently trading just under the 200 day SMA and this previous support level is now the near term upside “trouble area” for anyone looking for extended gains.
- Looking at the EUR versus other major currency counterparts we see that EURGBP is trading marginally higher on the day after piercing the 0.8000 level on the intra-day basis at +0.06% and EURJPY is trading at a -0.45% drop on the day. Cable has suffered a similar 0.20% drop to EUR/USD at time of writing this post with USDCHF up 0.22%.
Euro/Dollar Daily Chart