EURUSD Falls to the Bottom of Ascending Channel on Dollar Strength; Can It Hold On?
EURUSD is testing support around the 1.0800 psychological handle in today’s Asian session amid broad dollar strength. Among the major currencies, only the Japanese yen and Swiss franc (also considered as safe haven currencies) are trading higher than the dollar. Meanwhile, for EURUSD, it is down by 0.11% at 1.0806.
Aside from the Australian labor figures this morning, there was no other market-moving data or news. With most countries, including the US which has more than 80,000 coronavirus-related deaths, planning to re-open their economies, investors could be feeling jittery.
However, it’s worth noting that despite the recent sell-off on EURUSD, it is still on its uptrend. This is evidenced by the ascending channel (when connecting the highs and lows from May 7 to May 13) in which the currency pair is trading in. As of this writing, EURUSD is testing the bottom of the channel around 1.0810. A bearish close below the 1.0800 handle could invalidate the ascending channel and may mean that the currency pair is headed to near-term support at 1.0783 where EURUSD bottomed on May 12. If there are enough sellers in the market, currency pair could even fall lower to 1.0766 where it hit a low on May 7.
On the other hand, reversal candlesticks around 1.0800 could indicate that there is still some bullish momentum left in the market. EURUSD could then make its way up to the top of the channel around 1.0900.