EUR/USD supported at $1.3685
On Tuesday EUR/USD continued the sideways trade, staying in the $1.3770/3685 range. The pair remains quite resilient, despite the recent dovish ECB Draghi’s comments. Weaker US data offers support for the pair.
From the technical viewpoint, it is too early to speak about the bearish reversal in EUR/USD. EUR remains supported by the rising trend line (currently around $1.3740). The pair trades above the bullish Ichimoku cloud, MACD histogram is testing the signal line to the upside. In our view, the pair has room for growth as long as the $1.3685 support holds. Next resistance above $1.3770 lies at $1.3800, $1.3830 and $1.3890.
However, a drop below the key $1.3685 support could completely change the picture, confirming a double top (H4 chart). Next strong support lies at $1.3560/00.
Watch the German data on Wednesday and Thursday and the EZ CPI flash estimate on Friday. US will also release a bunch of data that will impact the market sentiment.
Chart. H4 EUR/USD