Daily Market Report – EUR/USD likely to test a static support August 07, 2017

EUR/USD Plunged Aggressively

Price edged lower on Friday and touched new lows, could decrease further in the start of the week as the USDX could climb much higher on the short term. USD managed to recover as the United States data have finally come in better.

USDX is trading right below the 93.50 psychological level and could jump above this obstacle again in the upcoming hours. The greenback could dominate the currency market if the USDX will have enough energy to resume the Friday’s throwback.

I’ve said in the previous analysis that we may have a bounce back on the dollar index if the 92.49 static support will hold, the index failed to reach and retest this level, signaling that the bulls are in the game.

Price dropped much below the upper median line (uml) of the minor ascending pitchfork after the failure to stabilize above this obstacle. Was almost to reach and retest the 1.1711 static support on Friday, but the bears weren’t so strong.

EUR/USD could still retest the mentioned support level and could move in range above it. Only a valid breakdown below this level will confirm a further drop. Could be attracted by the median line (ml) of the minor ascending pitchfork, where he could find support as well.

The perspective remains bullish on the Daily chart as long as the rate is trading above the mentioned support levels. The current drop is natural after the impressive rally and after the failure to reach and retest the 50% Fibonacci line (ascending dotted line) of the major ascending pitchfork.

A reversal sign will appear if will make a valid breakdown below the median line (ML) of the major ascending pitchfork, this scenario will take shape only if the USDX will climb towards the 95.00 psychological level.

GBP/USD Turned To The Downside

Price drops like a rock as the USD received support from the United States economic data on Friday, remains how long this corrective phase will be. Now is pressuring the 1.3046 static support and could approach and retest the warning line (wl1) of the minor ascending pitchfork.

The warning line represents a critical support because a valid breakdown will open the door for more declines in the upcoming period.

Support can be found at the upper median line (UML) as well, price goes down after the false breakout above the upside line of the ascending channel. Only a valid breakdown below the UML will validate a major drop.

USD/CHF Breakout In Play

USD/CHF is strongly bullish on the Daily chart and now is trying to take out the dynamic resistance from the median line (ml) of the descending pitchfork. A valid breakout will confirm a further increase towards the next upside targets from 0.9787 static resistance and from the upper median line (uml) of the descending pitchfork.

By Olimpiu Tuns

Market Analyst

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