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EUR/USD technical analysis: Bid but stuck at key Fib hurdle

  • EUR/USD is struggling to beat key fib hurdle. 
  • Tuesday’s Doji makes today’s close pivotal.

EUR/USD’s recovery from the overnight low of 1.1275 seems to have run out of steam at 1.1296 – 38.3% Fibonacci retracement of the rally from 1.1107 to 1.1412. 

The currency pair is currently trading at 1.1287, representing marginal gains on the day, having hit a high of 1.1296 a few minutes before press time. 

The key Fibonacci retracement of 1.1296 was breached on July 1. Monday’s drop invalidated the bullish inverse head-and-shoulders breakout confirmed on June 21. 

So far, however, the downside has been restricted around 1.1275. Notably, the pair created a doji candle with long upper shadow on Tuesday a sign of indecision in the market place. 

The focus, therefore, is on today’s close. Acceptance below 1.1275 (Tuesday’s low) would signal a continuation of the sell-off from the recent high of 1.1412 and open the doors to 1.1232 (50-day moving average). 

On the other hand, a close above 1.1322 (Tuesday’s high) would weaken the bearish case. That said, a close above the June 25 high of 1.1412 is needed to revive the bullish view.