EUR/USD could retrace to 1.4190 based on the following factors:
- RSI on hourly above 70
- Intrepidus FX Sell Signal
- EUR/USD is up based on technical break of the hourly channel (see chart 1 below)
- Profit taking on EUR/USD longs
- 1.43 is an established daily high since may (see chart 2)
- Same logic applies on USD/CHF Long
What could cause it to go higher?
- A continued selling off of the USD
Daily EUR/USD with established high near 1.4335
* EUR/USD back and forth price action was not impressive until the better than expected US GDP release was met by a negative equity reaction which sent EUR under 1.41. After digesting the data, which included benchmark revisions, equities took back losses and EUR bounced. The advance accelerated into the 16:00bst month end fix as EUR reached 1.4180. When USD bids nowhere to be found in thin post fixing activity EUR/USD extended to 1.4279 before it ran out of steam.
This is not a recommendation to sell EUR/USD. It means that when the market opens if EUR/USD fails to break through the high, selling could continue to fibo levels and hourly trendline. If EUR/USD breaks the 1.4279 high, expect it to go much higher initially.
There is a lot of fundamental pressure short USD at the moment, so if this is not a short term top, expect the EUR to explode.
