Bit risky trading ahead of this week due to positive release of data specially from Germany and Draghi compelled to make a statement after facing heavy criticism from German media to tone down his earlier European slowdown concern helped Euro’s recovery. Earlier mildly Dovish stance by Yellen during her nomination appearance in front of Banking senate Committee is also weighing on US Dollar. But in comparison Europe has more economic problems, as compared to strong German growth, which could disturb German celebration, since overall Euro region’s economy is faced with bigger challenges.
Euro could benefit, as technically it closed above 1.3480-90, which remain a strong support level and only break would challenge 1.3420-50 zones. However, it will have to take out the 1.3547 level to prevent a return to the 1.3295 level. Further out, resistance resides at the 1.3650 level where a break will aim at the 1.3710 level. Price hesitation may occur here but if violated it will target the 1.3800 level. Conversely, support lies at the 1.3300 level with a break turning focus to the 1.3250 level and possibly lower towards the 1.3200 level. We may see bulls come in here and turn the pair higher but further decline is seen expect a move lower towards the 1.3100 level. All in all, EUR remains biased to the upside in the medium though vulnerable.
Technical lines from top to bottom:
1.3870 capped the pair during the fall of 2011 and served as the “shoulders” in a H&S pattern. 1.38 is a round number and also worked as a temporary cap during that period of time and also in October 2013.
1.3710 was the previous 2013 peak, and served as a clear separator. The pair needed a big trigger to break above this line, and when it lost it again, the fall was painful.
1.3650 temporarily capped the pair during that period of time and is stronger after capping the pair in October 2013. It returns to serve as resistance. 1.3570 is the swing high of September 2013 and also proved itself as resistance quite a few times afterwards. It temporarily stopped the avalanche.
1.35 is a nice round number and was a pivotal line or “magnet” within the previous range. 1.3440 worked as a clear separator in early November 2013 and is a key line to the upside.
The round number of 1.34 worked as resistance several times in 2013, and is strengthening now. 1.3320 worked as a double top in early September and it was crossed only with a Sunday gap. It remains a clear separator of ranges.
It is followed by 1.3240, which capped the pair in April and also had a role in August. It worked as support in September. 1.3175 capped the pair during July 2013.
1.3100 is worked as temporary resistance in December 2012 and is becoming more important once again, after capping a recovery attempt in June and then in July and providing support in September. It is followed by 1.3050, which proved be strong support in May 2013, defending the round number in more than one occasion, but it is less significant now.
The very round 1.30 line was a tough line of resistance. In addition to being a round number, it also served as strong support and recently worked as a pivot line. 1.2940 is the next line of support. It worked as such during April and May 2013.
No comments:
Post a Comment