Towards the end of last week, Euro seemed to be heading up to a resistance line and reached a high of 1.3715 beofre closing the week at 1.3693. Yesterday, though, was a different story and price headed down. The low so far is 1.3526 this morning. It has since recovered to a high of 1.3684 in a series of bullish candles on the hourly chart. Here it once again is meeting an interim resistance line. The pair really needs to hold above 1.3612, the weekly pivot, for a bullish bias to prevail.
On the daily chart, I'm focusing on the upward sloping channel called a bear flag. Today's move down provided a second touch at the bottom of that flag. It's not unreasonable to believe price would now head upwards for another touch at the top which would be in line with longer range targets. However, the upwards price action last week and today has so far topped in the .618 region of the move down from 1.3862. Clearly, this 1.3716 area is the immediate resistance followed by 1.3862. Only above these is the bullish case stronger.
Support is the low of 1.3516 and 1.3479. Below that means the downtrend has been resumed and will open the door to much lower lows. Price action today should be telling.
Here's the daily chart:
© Dianne Fecteau, 2011. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
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