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.