Dear readers and followers, in the middle of the night (European time), the Euro bulls had a military exercise aimed at training how they will move once good news of an agreement between Greece & the EU. The “exercise” was over quickly, but it sure gave an idea of what to expect once an agreement about Greece is reached.
The price rose from levels below 1.13 to a daily high of 1.1352 in a short while, which was very exciting, unlike most recent price moves which have been boring to say the least. The latest from Brussels is that after 7 hours of talks, there is still no agreement, but both parties agreed on meeting again on Monday, so we probably have to wait until then to see the sort of excitement we saw last night. No matter how much we love & trust technical analysis, we cannot deny that the developments in the Greek issue will heavily influence the trading of this pair.
On the technical side of the equation, the importance of 1.1264 was confirmed again on Tuesday. When the price approached this level, it bottomed 9 pips above it, and then jumped about 70 pips. That was the second time we find support in the same area, Monday’s low was 1.1270, and Tuesday’s low was 1.1273, this is an obvious signal that this is a good support area.
The reason why 1.1264 is so important is that the single currency has found support just above this level twice, which is the short term Fibonacci 61.8% retracement. The question now is: did the Euro bottom very close to this Fibonacci level? And is it time to rise above 1.1534?
The first sign that this is the case was bottoming very close to this Fibonacci level on Monday. The second was Tuesday’s low which is very close to Monday’s low. Another sign was the inverted hammer candle pattern, which appeared on the hourly chart after reaching Tuesday’s low, and the jump to 1.1352 seen afterwards.
However, other potential targets for a bottom include the last key short term retracements: 71.4% retracement at 1.1222. At the moment, breaking this level is highly unexpected, but a bottom very close to it cannot be ruled out.
Resistance is provided by the slightly falling trend line from Monday’s high, which is currently running at 1.1330. This line is still important in spite of the small penetration it suffered overnight. A break above this level is expected to open the way higher towards the micro term retracements, 1.1357, 1.1385, 1.1412 & 1.1434. The most important of these levels is probably 1.1412, because the falling trend line from February 4th high is currently running just above it. As it is always the case with retracements, a top very close to any of those levels would be a weakness sign, while breaking above each of them would be a sign of strength.
As for the support, first we have 1.1285. This level is followed by 1.1264 & 1.1222. Both of these levels can provide strong support for the price, while breaking below both of them would be a sign of weakness that could affect the whole medium term bullish outlook. 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.
On the technical side of the equation, the importance of 1.1264 was confirmed again on Tuesday. When the price approached this level, it bottomed 9 pips above it, and then jumped about 70 pips. That was the second time we find support in the same area, Monday’s low was 1.1270, and Tuesday’s low was 1.1273, this is an obvious signal that this is a good support area.
The reason why 1.1264 is so important is that the single currency has found support just above this level twice, which is the short term Fibonacci 61.8% retracement. The question now is: did the Euro bottom very close to this Fibonacci level? And is it time to rise above 1.1534?
The first sign that this is the case was bottoming very close to this Fibonacci level on Monday. The second was Tuesday’s low which is very close to Monday’s low. Another sign was the inverted hammer candle pattern, which appeared on the hourly chart after reaching Tuesday’s low, and the jump to 1.1352 seen afterwards.
However, other potential targets for a bottom include the last key short term retracements: 71.4% retracement at 1.1222. At the moment, breaking this level is highly unexpected, but a bottom very close to it cannot be ruled out.
Resistance is provided by the slightly falling trend line from Monday’s high, which is currently running at 1.1330. This line is still important in spite of the small penetration it suffered overnight. A break above this level is expected to open the way higher towards the micro term retracements, 1.1357, 1.1385, 1.1412 & 1.1434. The most important of these levels is probably 1.1412, because the falling trend line from February 4th high is currently running just above it. As it is always the case with retracements, a top very close to any of those levels would be a weakness sign, while breaking above each of them would be a sign of strength.
As for the support, first we have 1.1285. This level is followed by 1.1264 & 1.1222. Both of these levels can provide strong support for the price, while breaking below both of them would be a sign of weakness that could affect the whole medium term bullish outlook. 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.
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