EUR Trading Outlook
Technical support level at .9060, which is the 76.4% retracement of the rally from .8845, held on the first test. The short-term charts are showing a possible reversal pattern (see chart) which the retail market in particular tends to trade off. Hourly closes back above .9135/40 should lead to an increase in bullish momentum. Similarly, a break below .9050 will increase bearish momentum.
The next technical support level is at .9060 (see chart) which is the 76.4% retracement of the rally from .8845. If that level breaks then it opens the way for a full retracement to .8845 and possibly to more long-term technical support near .8650. Initial resistance levels start at .9135 but are much stronger near .9200.
The almost vertical fall on the short-term charts has re-commenced and the inability to break back above relatively minor resistance levels (and then fall heavily) shows just how strong the downtrend is. Next support levels come in near .9060 (see chart) which is the 76.4% retracement of the rally from .8845.
After an almost vertical fall, the hourly chart looks like it’s taking a breather and we could see a modest retracement back towards Friday’s highs and a 38.2% near .9245 (see chart). There is more short-term resistance ahead of there at .9185/00 and support levels start at yesterday’s lows near .9120. The downside technical target is a 76.4% retracement level at .9060.
Short-term momentum remains very bearish and any rallies back towards previous support and Friday’s highs at .9225/50 should be considered a selling opportunity. The move from .8845 to .9755 developed as a 5-wave up-trend and that should be respected, meaning that the 76.4% Fibo at .9060 is still relevant (see chart).
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