Bottom line: EURUSD bullish structure is expected to remain intact until prices stay above the 1.0636 mark. Bulls seems to be back in control after last week’s low at 1.0730 levels. The morning star on the weekly chart shown here still remains valid and could push prices much higher, going forward.
Fundamental Outlook:
EURUSD may come under some pressure as the Q1 GDP figures and the ECB Meeting are scheduled later this week. Under the COVID-19 economic impact, the ECB is expected to make available another stimulus package of EURO 540 Billion by June.
Italy, which was the worst hit by the COVID-19 pandemic, finally prepares to end shutdown in a phased manner starting May 04, 2020. The COVID-19 curve continues to flatten globally with lower cases and deaths reported.
Oil prices continue to slide lower as we write this article. Brent Crude trades close to 20.00 mark while WTI Crude is trading lower around $15 per barrel as global demand continues to plunge amidst the COVID-19 pandemic.
Technical Analysis:
EURUSD bulls seem to be back in control after printing lows around 1.0730 levels last week. The single currency is seen to be trading around 1.0855 at this point, and is expected to continue higher towards 1.0900 as immediate target.
EURUSD had earlier produced an Engulfing Bullish candlestick pattern on the weekly chart. A meaningful low seems to be in place at 1.0636 since then. The rally between 1.0636 and 1.1150 was the initial boundary that was retraced last week.
On the lower time frames EURUSD had dropped to fibonacci 0.786 retracement of the previous rally and found support at 1.0730. A corrective drop seems to be now complete and bulls are poised to push higher towards 1.1500 from here.
Immediate resistance is seen towards 1.0900, while support is seen towards 1.0636 respectively. A break above 1.0900 would confirm a bullish reversal ahead. Corrective drops might be good to buy after that.
Most traders might be willing to initiate fresh long positions around current levels (1.0850/55), with a protective stop below 1.0636 and projected target above 1.1500 respectively.
Prepared by
Harsh Japee, Technical Analyst.
EURUSD Chart
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