The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
Is EUR/USD turning a corner?
EUR/USD broke higher in a convincing manner yesterday, with the pair subsequently selling off from the crucial swing high of $1.1220. It is important to note that we have now set a small higher low and a marginal higher high. This points towards the potential for a shift in sentiment to the upside.
It is worth noting that the medium-term picture for the pair has clearly shifted towards a bearish view and thus any period of upside in the coming days or weeks would be seen as a retracement of the May sell-off. For the near-term, the ability to break back above $1.1220 would add significant weight to the notion that we could be seeing a bottom in play, with $1.1345 the next major resistance level.
However, with the price currently consolidating, there is clear hesitancy ahead of the non-farm payrolls figures. Areas of particular interest to the downside are the 76.4% retracement ($1.1139) and the swing low of $1.1114, which if taken out would negate the view that we could be seeing a bottom.