BUZZ-COMMENT-Second chance looms for left-out EUR/USD bulls
July 31 (Reuters) - EUR/USD beat a swift retreat on Friday after hitting 26-month highs, generating short-term bearish signals that may ultimately benefit bulls who missed the opportunity go long when the euro broke through 1.1450 resistance earlier this month .
Daily RSI, which was in deep overbought territory, diverged on the new high and a daily inverted hammer formed during Friday's session. Both signals implied a correction in the rally was likely.
Monthly RSI implied longer-term bullish momentum remained and the rally off the March 2019 monthly low was nowhere near being in jeopardy. Longer-term indicators suggested the rally would resume toward new highs.
Bolstering the longer-term view was the U.S. interest rate outlook, which should keep the dollar from rallying significantly.
Ten-year U.S. Treasury yields continued in their bear trend, while fed funds futures prices remained buoyed near recent highs after the Fed pledged to use its full range of tools . Futures still projected rates would turn slightly negative in 2021 FFN1.
EUR/USD support sits in the 1.1800 region and 1.1570/1.1630 zone. Longer-term bulls likely lurk in those areas.
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(Christopher Romano is a Reuters market analyst. The views expressed are his own)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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