EUR/USD Retreats Again from 1.1040

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EUR/USD Retreats Again from 1.1040

EUR/USD looked like it was poised for a bullish breakout after last Friday’s disappointing US NFP jobs report. Let’s follow up on the reaction because the bullish push lost steam during the Monday 4/6 session. (Video at the end of article)

EUR/USD 4H Chart 4/7
eurusd 4h chart 4/7
(click to enlarge)

As we can see in the 4H chart, price stalled at 1.1040 again, a previous resistance. This tells us 2 main things.

1) Bulls are not strong enough yet and the market is still neutral-bearish since EUR/USD reached a low on the year at 1.0462. Before that, it was simply bearish.
2) The fact that there are a lot of sellers at 1.1040 means that a lot of stops are probably just above it. This means, a break above 1.1040 or maybe 1.11 should send the EUR/USD rallying sharply in the short-term. Still, we should limit the bullish outlook in this scenario to a previous support pivot around 1.1270. The most aggressive outlook should probably still be limited to the 1.1440-50 area.

Now, if price retreats below 1.08, we are likely in bearish continuation and the EUR/USD would be pressured first to the 1.07-1.0715 area, then the 1.0462 low on the year.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.