FX.co ★ EUR/USD Intraday Technical Analysis

The spot rate broke the intermediate support of its medium term channel at 1.2330 leading to an acceleration following significant downward revision of growth prospects by the ECB and by a series of Chinese disappointing economic indicators yesterday. At the same time, it evolves now in a short term bearish channel and tests the intermediate resistance of this one at 1.2300. A break of this level will allow it to reach the upper limit of its channel at 1.2340.
Technical indicators provide buy signals supporting the assumption of a pull back and it can support the assumption of a break of its resistance. Bollinger bands have greatly tightened in recent days showing a decline in volatility and the imminence of a violent movement.
In this case the best way to intervene in the market while limiting the risks, would be to try a “buy stop” in buying as soon as the spot rate is broken through its resistance of 1.2300 with the 1st objective at 1.2340 and then at 1.2360. A breakthrough 1.2280 will invalidate this scenario.