This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material 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 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. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Fibonacci frenzy could spark EUR/USD reversal
EUR/USD has been respecting the 76.4% retracements very well of late, with yesterday seeing yet another deep retracement turn lower.
Given that we are within a wider retracement which has hit the 76.4% pullback of the referendum sell-off, we are looking out for signs of a bearish reversal from these levels. This current sell-off could provide that, with a break and hourly close below $1.1271 marking the creation of a double top formation. Below that, the $1.1241 support level is also a crucial hurdle to overcome.
However, a bearish view remains and is gradually looking more likely to come to fruition. As such, the wider picture means a bearish view is held unless we see an hourly close above $1.1428. However, on the short-term, the day’s direction is likely to be dictated by whether we see an hourly close below $1.1271 or not.