The euro fails to break above the horizontal channel

  • EUR/USD recovery fails to break past 1.1000 and the pair retreats to 1.0900 area.
  • The euro remains trapped within a consolidative channel between 1.0770 and 1.1000.

 

The euro opened the week on a strong footing, buoyed by a positive market mood as the main economies started easing coronavirus lockdowns. The pair appreciated about 1.7% to find sellers several pips below 1.1000 psychological level, right at the top of the horizontal channel, between 1.0770 and 1.0980 where the EUR/USD has remained trapped over the last two months.

The common currency has given away gains over the last sessions retreating to the 1.0900 area, weighed by US dollar strength as market mood worsened amid the escalating tensions between the US and China.

EUR/USD daily chart

 

The 4-hour chart shows the pair still above the main moving averages, which suggests that bulls remain in control in the medium-term. A clear move below 10870/80 area where the moving averages lie, might increase negative momentum and might send the pair to test 1.0800 before aiming for trendline support at 1.0770.

 

On the upside, 1.1000/15 (trendline resistance and the 200-day SMA) remains a key resistance area. Above there the pair might gain bullish traction paving the path towards 1.1040 (March 31 highs) on the way to 1.1145 (March 27 high).

 

EUR/USD 4-hour chart

 

EUR/USD key levels to watch