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EUR/USD Meets Selling Interest Ahead of Key Resistance

EUR
  • EUR/USD's intraday recovery (triggered by USD weakness, rather than broad EUR strength) has met some resistance at the daily high of 1.0880 as markets fail to build on gains above yesterday's 1.0876. Today's high is just short of key resistance and a notable upside level at 1.0888 - the top of the tail of a shooting star pattern printed on Feb 22, which continues to highlight a possible bearish reversal.
  • The tail of the inverted hammer intersected with the 50-dma - a level pierced, but not convincingly broken in Tuesday trade.
  • This raises focus on the heavier frequency of risk events over the next three days, with Powell's House/Senate testimonies on Weds/Thurs, the ECB decision on Thurs and NFP on Friday. A EUR negative, USD positive theme into the end of the week would raise focus on 1.0791 - the 50% retracement of the recovery bounce off Feb14's 1.0695.
  • Below here, the bounce would be deemed corrective and could signal a resumption of the over-arching downtrend off the Dec28 high.

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