EURUSD Eyes 1.1120 After US Q2 GDP News
The EUR/USD pair fell to a fresh weekly low of 1.1202 before bouncing up to the current 1.1250 area, and still looking short-term heavy, as in the 1 hour chart, the price is clearly consolidating below its 200 SMA, whilst the technical indicators are posting mild declines below their mid-lines.
In the 4 hours chart, the technical indicators are bouncing from oversold readings, but remain far from suggesting the decline is over, whilst the 20 SMA has turned sharply lower well above the current price. A break below 1.1200 should see the pair extending its decline down to 1.1120, a key mid-term static support level.
Not to mention the American dollar was on demand ever since the day started, as the recent risk-negative sentiment reverted during the past Asian session, following a sharp recovery in the Shanghai Composite, up 5.34% this Thursday.
The USD dollar advance after the release of the US Q2 GDP advanced reading showing that the economy grew at a faster-than-expected pace, printing 3.7% against expectations of a 3.2% advance.
Stocks closed with gains both in the US and Europe, supporting another positive day in Asian share markets.
Meanwhile the USD/JPY pair regained the 120.00 level during the past Asian session, boosted by the recovery in Asian share markets and renewed dollar’s buying interest.
The pair however, held near the 120.50 before finally surging in the American afternoon, up to 121.39, meeting selling interest around the 61.8% retracement of these last two-weeks decline.
Japan will release its National and Tokyo inflation during the upcoming session, and better-than-expected results may help the yen extending its recovery.
In short term, the 1 hour chart shows that the price is now well above its 100 SMA that anyway maintains a bearish slope, whilst the RSI retreats from overbought readings, now heading lower around 61, limiting the upside as long as the price holds below the mentioned Fibonacci level.
In the 4 hours chart, the Momentum indicator turned south, but remains above the 100 level, whilst the RSI hovers around 53, supporting additional gains, should the price extend beyond 121.40.