EUR/USD tests 1.1600 resistance on a Dollar consolidation reaction
InvestingOnline.com
7/08/2018, 16:38The Euro is trading positive on Tuesday against the US Dollar as investors took a pause on the rally of the Dollar index. The DXY is trading down, and major rivals are making profit of that.
The dollar index is trading in consolidation mode at 95.15 after testing the 95.50 area yesterday. Technical situation for the DXY is pointing for further gains.
Technical indicators for the DXY are pointing for further gains. The MACD is positioned to the upside while the RSI is showing that the DXY uptrend is healthy and ready for further increases. 20, 50 and 200 days moving averages are aligned to the upside too.
EUR/USD is currently trading 0.36% positive on the session as the pair is moving at 1.1595. It is extending Monday’s bounce from 1.1530, which was the lowest level since June 30.
EURUSD daily chart August 7
Despite the bounce, more declines can’t be ruled out as EUR/USD gains are backed for consolidation in the Greenback, not for euro strength. Any upside movement in the Dollar would trigger more declines for the EUR/USD.
Technical conditions for the EUR/USD are weak as the MACD is pointing to the downside while the RSI is showing weakness in the pair. Moving averages are leading to the south, including a recent 20-day MA break below the 50-day moving average.
In this framework, market could expect that the upside move in the Euro-dollar is not strong enough. However, a break above the 1.1600 area and the 20 and 50 days moving average zone around 1.1560 would put the pair in the direction of the critical 1.1750 resistance.
On the other side, if the pair doesn’t break above the 1.1600 level, the EUR/USD would return to Monday’s low at 1.1530. Then supports are at 1.1515 and 1.1440.
