EUR-USD: Backing Off the Low

EUR-USD: Having continued to maintain its corrective weakness triggered at the 1.5062 level, EUR weakened to as low as 1.4625 on Tuesday before bouncing off that low to close marginally lower at 1.4731. With a rejection candle now in place, the pair could be preparing to trade higher.

In such a case, its Nov. 02 high at the 1.4844 level will be the aim. A breach there will allow the EUR to strengthen further toward the 1.5000 level and then its year-to-date high at 1.5062. A loss of that level should trigger the resumption of its medium-term uptrend, now on hold.

We still keep our bearish outlook nearer term on the pair, unless a break and hold above the 1.4844 level occurs. Initial support lies at the 1.4625 level ahead of its MT rising trend line, currently at 1.4593. That's where we expect a cap. However, if that fails to materialize, price acceleration should shape toward the 1.4479 level, its Oct. 02 low. On the whole, though vulnerable to the downside, EUR looks to build on its rejection candle printed on Tuesday.