EUR/USD Meeting Overhead Resistance

Frankfurt (Mar 23)  EUR/USD is lower in today’s trading as the US dollar has steadied ahead of today’s US healthcare vote. Congress is expected to vote today on a Republican healthcare bill to replace the Affordable Care Act. The dollar is currently up 0.07% at 99.80, while EUR/USD is trading at 1.0777, a loss of 0.18% from Wednesday’s NY close.

Also in focus today is a talk by Federal Reserve Chair Janet Yellen, who could give further insight into the pace of interest rate hikes in the US throughout the remainder of the year.

EUR/USD is currently meeting resistance at a down trendline dating back to May 2016, as can be seen on the daily chart. The pair is also overbought and up against resistance at the high established in early February at 1.0829. These converging resistance levels, combined with the overbought condition, a minor negative divergence on the Stochastic, and test of the upper Bollinger Band could work to keep the pair under pressure in today’s session.

On the downside, first support is at Tuesday’s low at 1.0719. Holding this area would keep the bias firmly to the upside. On a drop below this level, the mid-point of March 15th’s wide price range could provide support value. That level, derived from the open-close range, is at 1.0668 and is near the same level as the 50% retracement of the advance that has taken place in March in the pair. At present, that level is expected to hold and a period of weakness appears best used as a buying opportunity.

On the upside, the next area of resistance is at the high established December 8 at 1.0768, which represents a test of the lows established in the latter part of October.

In economic news today, weekly jobless claims data in the US will be released at 08:30 ET, while Fed Chair Yellen speaks at 08:45 ET. US New home sales will be released at 10:00 ET.

Soiurce: EconomicCalendar