My dears friends and followers here, as expected, the Euro jumped to a 1-week high at 1.1440 earlier today. However, the single currency may start facing problems after testing the short term 71.4% retracement, which is only 6 pips below today’s current daily high.
If the price start drifting away from today’s current high, it will be a sign that the level has capped this bullish adventure, and that the price will start dropping again. The support we need to break below in order to gain confidence in this idea is 1.1415. A break below this level would be a first sign of weakness, and if the price breaks below this level it will be expected to target at least one of the micro term retracements at 1.1379, 1.1360, 1.1341 & the important 1.1326. It is not probable to break below all of these levels, but testing one or more of them will become highly probably once 1.1415 gives way. However, if the surprise happens, and we break below 1.1326, that would open the way once again towards the support levels in the $1.12 area, and the 2 most important levels in this area are 1.1262 & 1.1222. At the moment, breaking this level is highly unexpected, but a bottom very close to it cannot be ruled out. First target for the surprising break of 1.1222 would be 1.1159, ahead of the very important 1.1097. A clean & clear break below this level would take away our best reason for expecting a major rising move on the medium & long terms.
Resistance is of course at 1.1434 which was just tested. As it is always the case with retracements, a top very close to this level (like for example keeping the current daily high 1.1440 or reaching yet another one that is reasonably close to it) would be a weakness sign, while breaking above it would be a sign of strength. A break above this level would target 1.1466 first, ahead of 1.1499, 1.1534, 1.1567 & an important level at 1.1596. A break above this level in specific would indicate ability to trade above February 3rd short term top 1.1679. In this case, 1.1727 makes a good target.
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