Main Support On EURUSD
FХ Strategist & Financial Commentator
After 6 consecutive bearish sessions, yesterday this pair finally generated a bullish pin bar, testing the main support around 1.09 where 2019 bottoms were recorded, before the last bullish rally ended on the last trading session of 2019 on 1.1250 area.
The volatility continues to remain very low and is currently just a bit higher than the bottom of the last 5 years. In my opinion, a possible increase in the coming days could favour a bounce by the Euro that in this first part of 2020 is really really weak.
The RSI indicator on his hand, on last Monday, fell under the oversold area again: this signal it seems rather interesting, if we consider how in the recent months, this technical condition has always led to a bounce of the Euro, at least temporarly.
In this case, the combination of an oversold RSI and the support test around 1.09 area could favour a bounce right today, with a target price on 1.1000 area.
As always, the setup would be denied in case of a close below 1.0880 where we can detect the very bottom of October 2019.
By the way this first bounce, could be followed by a new bearish swing towards 1.08 area and this could allow the pair to build a bullish divergence on the RSI in the next 2/3 weeks: if this happens, I would really take under serious consideration, the idea to open a longer-term trade on Euro waiting for a wider upward movement.
As always I recommend to trade carefully and to plan at best every move. Have a good trading and see you for the next video.