Although US housing data failed to meet consensus Wednesday, the US dollar index managed to maintain position north of the 97.00 handle. Leaving 1.13 unchallenged on the H4 timeframe, the candles dipped to support at 1.1221 (a prior Quasimodo resistance). This level joins closely with the 1.12 handle and a 38.2% Fibonacci retracement ratio at 1.1173.
EUR/USD H4 movement came within touching distance of reaching support at 1.1221 (a prior Quasimodo resistance), before marginally recoiling. This level joins closely with the 1.12 handle and 38.2% Fibonacci retracement ratio at 1.1173.
The US dollar, represented by the US dollar index, switched gears Monday and turned lower, consequently snapping a two day-bullish phase. On the EUR/USD front, H4 support at 1.1221 (a prior Quasimodo resistance), maintained its presence, bolstered by H4 trend line support, taken from the low 1.0727.
A favourable euro wind elevated EUR/USD over the past three weeks, recently delivering a blow to the 2020 yearly opening level at 1.1222. However, impetus lacked in recent trade after shaking hands with long-standing trend line resistance, extended from the high 1.2555.
USD longs made a comeback Thursday, with the DXY staging a stronger-than-expected recovery above 96.50. This firmly weighed on the euro, the largest component of the index making up almost 58%.
