EUR/USD: Bulls need a break above 55-day EMA, focus on Fed
- The 55-day exponential moving average (EMA) is the level to bet for the EUR/USD bulls.
- Risks surrounding the EUR/USD pair are skewed to the downside, markets seem to have run ahead of themselves while pricing in the Fed's potential dovish turn.
The EUR/USD pair is up more than 100 pips from last Friday's low of 1.1270, but a bull breakout would be confirmed after the 55-day exponential moving average (EMA) is convincingly scaled.
The EMA line has caught highs on a daily closing basis three times in the last 2.5 months. As a result, it is the level to beat for the bulls.
At press time, EUR/USD is trading at 1.1387 and the 55-day EMA is lined up at 1.1409. A daily close above the EMA line will likely be followed by a sustained rally to 1.1515 (50% Fib R of 1.1815/1.1215) and above.
The bull breakout above 55-day EMA, however, may remain elusive if the Fed once again leaves investors behind the curve with a less-dovish-than-expected forecast of two rate hikes in 2019. Moreover, the markets are currently assigning just 30 percent probability of a single rate hike for the whole of 2019.
EUR/USD, however, could pick up a strong bid if the US central bank drops hints of a rate hike pause in 2019.
EUR/USD Technical Levels
Today Last Price: 1.1388
Today Daily change: 24 pips
Today Daily change %: 0.211%
Today Daily Open: 1.1364
Previous Daily SMA20: 1.1354
Previous Daily SMA50: 1.1394
Previous Daily SMA100: 1.1491
Previous Daily SMA200: 1.1708
Previous Daily High: 1.1404
Previous Daily Low: 1.1337
Previous Weekly High: 1.1444
Previous Weekly Low: 1.1269
Previous Monthly High: 1.15
Previous Monthly Low: 1.1216
Previous Daily Fibonacci 38.2%: 1.1378
Previous Daily Fibonacci 61.8%: 1.1362
Previous Daily Pivot Point S1: 1.1332
Previous Daily Pivot Point S2: 1.1301
Previous Daily Pivot Point S3: 1.1265
Previous Daily Pivot Point R1: 1.1399
Previous Daily Pivot Point R2: 1.1435
Previous Daily Pivot Point R3: 1.1466