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Chart Of The Day: EUR/USD Reaches Key Hurdle 

By Fawad RazaqzadaForexJan 14, 2022 14:31
uk.investing.com/analysis/chart-of-the-day-eurusd-reaches-key-hurdle-200507500
Chart Of The Day: EUR/USD Reaches Key Hurdle 
By Fawad Razaqzada   |  Jan 14, 2022 14:31
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This article was written exclusively for Investing.com

This week’s dollar weakness has probably caught many people by surprise, especially when we have had lots of hawkish commentary from Federal Reserve policymakers and soaring inflation.

Yet, the greenback weakened anyway. They key question remains as to whether the weakness is going to be short-lived or whether we have seen the top. 

While we may see further weakness against some currencies in the short-term, the dollar will likely find support against currencies where the central bank is considered dovish, such as the yen and euro. Even so, conservative traders must wait for the appropriate signal before going long the dollar. 

In fact, the EUR/USD has now reached the next big resistance zone circa 1.1480 to 1.1530 as you can see on the weekly chart:

EUR/USD Weekly
EUR/USD Weekly

This area was formerly resistance in the first half of 2020, before giving way later in that year. It then offered some mild support on re-test from above between October-November 2021, before the bears drop rates below it. 

So, will this 1.1480-1.1530 area now resume its role as resistance and provide a ceiling for the EUR/USD or give way and we go much higher?

The daily chart shows we have the 50% retracement and 61.8% Fibonacci level confluence around the psychologically-important 1.15 handle, too.

EUR/USD Daily
EUR/USD Daily

With all these technical factors converging here, and given the fact the Fed is looking to tighten its policy somewhat aggressively this year, I would be looking for signs of a bearish reversal to short the EUR/USD back towards support around 1.1380 area. 

That said, we must first see a confirmed reversal signal first. 

Chart Of The Day: EUR/USD Reaches Key Hurdle 
 

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Chart Of The Day: EUR/USD Reaches Key Hurdle 

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Disclaimer: Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warrant that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, nor does the author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
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