The euro failed to hold early gains against the dollar yesterday and extended its losing streak against the dollar four sessions. But that does not necessarily mean that any consolidation or correction has already played and the price of today's action supports it.
Of course, it is easy to say at this time, with today's prices have already removed the tops of yesterday and still trading above. But there were warning signs before that.
The candle represents indecision yesterday and while it is considered more bullish than bearish, as the bulls were unable to maintain gains, does not require confirmation. The inability of bears to create new lows today means that the confirmation was lacking. The fact that the price instead crossed the peaks of yesterday is quite optimistic.
Another good warning sign was the divergence between the price action and the MACD and Stochastic, leading to new lows being made yesterday but the move getting no traction whatsoever. In fact, the 4 hour candle was not even close below the lower front and the next attempt to break below the new lower failed.
Following another strong move higher in the pair around the US Open, the pair faces resistance around 1.0920, which coincides with low 7 July . While we can see some profit taking at this level, there is still a lot of momentum in this movement, suggesting any consolidation will be temporary. Of course, this may change, but this is the way it currently appears
As pointed out yesterday (EURUSD - Positive Start But still bearish outlook). If the pair passes above this level the next significant level of resistance would be 1.0965. This is a previous support level and 38.2% retracement of the move from 10 to 20 July peaks low in July
Further resistance could be found above here between 1.090 -. Line marabuzo emphasized yesterday - 1.1020 and with it having previously been a key area of support and resistance. It is also allows tracing of 50% of the above movement.
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