Morning outlook - EUR/USD slips on Catalan referendum
In line with expectations, the currency exchange rate managed to break to the top, crossing the 100-hour SMA plus another resistance level near 1.1810. During the two-day surge the pair even formed a little ascending channel. But due to referendum on independence in Catalonia the Euro lost 0.3% against the Dollar and fell out of the channel.
The fact that now the pair is located below a combination of the 55- and 100-hour SMAs, suggests that might continue to the move to the bottom. The downfall might be additionally spurred by the official comments from the EU, Catalan and Spanish governments through the day.
However, this event is unlikely to change the general scenario, according to which the rate is expected to continue to climb to the top after bouncing off from the 100% Fibo at 1.1715.
In line with expectations, the currency exchange rate managed to break to the top, crossing the 100-hour SMA plus another resistance level near 1.1810. During the two-day surge the pair even formed a little ascending channel. But due to referendum on independence in Catalonia the Euro lost 0.3% against the Dollar and fell out of the channel.
The fact that now the pair is located below a combination of the 55- and 100-hour SMAs, suggests that might continue to the move to the bottom. The downfall might be additionally spurred by the official comments from the EU, Catalan and Spanish governments through the day.
However, this event is unlikely to change the general scenario, according to which the rate is expected to continue to climb to the top after bouncing off from the 100% Fibo at 1.1715.
Contrary to expectations, the currency pair broke through the combined support set up by the 100% Fibonacci retracement level at 1.1715 and the updated weekly S1 at 1.1710. The reason behind such deep immersion was based on several reasons, such the Catalan referendum and a release of better than expected data on the US manufacturing activity.
There is a small chance that the Euro will manage to restore some positions against the Dollar.
However, the average market sentiment remains 58% bearish. In addition to that, now traders can rely on the above technical barriers, as a resistance to push the rate towards the 1.17 mark. By the way, from the south the rate does not face any notable obstacles up until the monthly S1 at 1.1658.