Chartbook: Chart EUR/USD: Extending cautious trade
Little change, as prices extend consolidation beneath congestion resistance at 1.1000
Little change, as prices extend consolidation beneath congestion resistance at 1.1000.
Monthly stochastics and the monthly Tension Indicator are edging lower, highlighting room for a move lower into 2024Q3, with a break below the 1.0600 monthly low of 16 April opening up strong support at the 1.0500 break level. Just beneath here is the 1.0415 Fibonacci retracement, but rising longer-term charts are expected to limit any tests in fresh buying interest/consolidation.
A close below 1.0415, however, will turn sentiment outright negative and confirm completion of the multi-month distribution top beneath 1.1000, as July 2023 losses gain fresh traction and open up a test of the 1.0200 retracement.
Meanwhile, resistance remains at congestion around 1.1000,
and should cap any tests higher as weekly charts also turn down.
A close above here, if seen, would turn price action cautiously positive and open up further resistance at 1.1200.
However, a close above the 1.1275 year high of July 2023 and Fibonacci retracement is needed to turn sentiment outright positive and confirm continuation of September 2022 gains from 0.9535, initially targeting the 1.1500. Just higher is the 1.1685 retracement.