In view of Tim Riddell, Research Analyst at Westpac, daily momentum of EUR/USD has now peaked and the style of this roll-over suggests slippage towards rising channel support as the Macron-gap fits perfectly with other technical levels to suggest initial key support (1.0820) as well as downdraft potential to close the gap (1.0730).
- Although weekly momentum appeared to break higher, this has merely allowed for a move to the mid-point of EUR/USD’s 18-month range
- Momentum has now become more mixed and failure to sustain levels above 1.10 underscores the potential of sliding again to retest range lows”
- EUR/USD continues to consolidate within a horizontal triangle/pennant. Such patterns normally precede a final leg lower to complete a long term trend
- Monthly momentum remains broadly neutral, despite a mild supportive tone. Risk of an early base should not be ignored, but a downside range flip is still favoured”