EURUSD Extends Gains; Testing Critical Near-term Resistance

The EURUSD is holding well above the resistance at 1.10655 formed by the neckline of the October 2019 double top in Monday’ s New York trading session. The pair had completed the measured move from the breakdown of this neckline to confirm the double top, but has since reversed upwards to record gains in three trading sessions to take the pair to intraday highs of 1.1071.

The Fibre needs a decisive close above 1.10655 (neckline resistance and previous lows of August 16 and 20) to make a push towards the next upside target at 1.11060 (61.8% Fibonacci retracement from August 6 swing high to October 1 swing low).

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On the flip side, failure to break the neckline with a decisive close to the upside reopens the door to the 38.2% Fibonacci target price of 1.10197, where price formed lows on September 6 and November 8.

Economic indicators that will provide additional price movement for this pair include the FOMC meeting minutes on Wednesday, as well as Friday’s speech from new ECB President Christine Lagarde and the Eurozone PMI data from Germany and France.

The Eurozone PMI data have assumed major importance on the back of repeatedly poor results that have dampened the economic outlook; a fact that was mirrored in today’s report from the Bundesbank.More content