FxWirePro: No room for EUR/USD long term bulls -bears restrain short term speculators max upto 23.6% fibo retracement

The euro has started the trading week with minor gains, as the pair trades at the 1.1060 on 8th March began tumbling.

Bears lined as Euro retreaded below 1.0976 levels, many turned a sceptical eye to Thursday's crucial meeting of the ECB.

The 19-country central bank is expected to lop a key rate further below zero while it may also opt for a longer and larger QE bond-buying program that aims to juice the economy by anchoring interest rates to spur faster borrowing and spending.

The pair has rejected at important resistance at 1.1060 levels by forming Shooting star candle to slip below 21DMA curve.

It is currently hanging around supports again at 1.0976 levels with leading oscillators to diverge the previous rallies.

If it doesn't manage to hold onto this level, then the next strong support can be seen at 1.0969 levels While leading oscillators converge downward to these price dips.

Even if it holds the current levels, we see restricted upside potential at around 23.6% fibo levels, at this juncture momentum in previous rallies likely to collapse, long term downtrend seems intact.

RSI (14) on weekly and daily chart diverging to the sideway trend and being bearish bias (Currently, daily RSI trending below at 47.9837 while articulating). This technical indication has started evaluating the momentum when prices touched 1.1060 by taking the computation of last 14 day periods the magnitude of recent gains to recent losses in an attempt to signifying the overbought pressures.

While %D crossover on weekly has been maintained on slow stochastic curve with every price dips again both on daily and intraday charts (Currently, %D line at 41.9762, while %K line at 24.7673). Stochastic on monthly curve also remains in the oversold territory but no proper trace of %K crossover that signifies weakness in the euro.

Hence, in long run we still project below or around 1.12 (23.6% fibos) for Q1 end-2016, a cyclical low of 1.08 in Q2 2016.