- 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.