Upbeat risk sentiment weighed on the US dollar index Monday, firmly snapping a four-day bullish phase. EUR/USD H4 reclaimed 1.12+ status and recently conquered 1.1250, with eyes now on 1.13 as potential resistance, followed by a Quasimodo formation at 1.1340.
The British pound put in additional declines against the buck last week, extending south of the 61.8% Fibonacci retracement ratio at 1.2718 and 2019 yearly opening level at 1.2739. It should also be emphasised these levels are positioned beneath a long-term trend line resistance, etched from the high 1.5930.
Driven by USD strength Thursday, with the US dollar index recently shaking hands with 97.50, EUR/USD tackled H4 support at 1.1221 and the round number 1.12. This exposed a 38.2% Fibonacci retracement ratio at 1.1173 and a potential 127.2% AB=CD correction (black arrows) at 1.1150.
Although US housing data failed to meet consensus Wednesday, the US dollar index managed to maintain position north of the 97.00 handle. Leaving 1.13 unchallenged on the H4 timeframe, the candles dipped to support at 1.1221 (a prior Quasimodo resistance). This level joins closely with the 1.12 handle and a 38.2% Fibonacci retracement ratio at 1.1173.
EUR/USD H4 movement came within touching distance of reaching support at 1.1221 (a prior Quasimodo resistance), before marginally recoiling. This level joins closely with the 1.12 handle and 38.2% Fibonacci retracement ratio at 1.1173.
