Yesterday’s my laptop was troubled and I focused on the importance of 1.1159 as , as a strong support which was expected to hold but nothing much I can do in that situation for my trading and analysis too. The daily low which was already reached when my analysis came out at 1.1161, continued to be the daily low for the whole day, and now we could say that we have an interesting (if not important) bottom at yesterday’s low 1.1160. This low is one single pip above 85.7% short term retracement. This proves that this is an important support. As usual, accurate stops on retracements levels (Fibonacci) are alerts that the price could switch direction. In this case, bottoming accurately at 1.1159 means there is a chance that the Euro is going to switch direction, from downtrend to uptrend, at least for the short term. Another sign of this happening is that the price did reach the bottom of the falling 4-hour channel that can be seen on the attached chart. However, the reaction so far is not very strong, and this is a sign that we need to be careful.
If the price is to start recovering we need to see it breaking above an important resistance, before we get overexcited. First resistance is provided by the micro term Fibonacci 38.2% level at 1.1247, which is also very close to Friday’s & Monday’s daily highs, which were 1.1245 & 1.1240 respectively. A break above this level would be a good start, especially if it comes while yesterday’s low is not broken. However, even if the price breaks above this level, it will need to prove strength against other levels at 1.1275, 1.1302 & the important 1.1324. Above here things will become much better for the bulls, and the price will be expected to target the very important 1.1389. A break above this level will be fantastic for the short term bulls, as it will probably result in rising move that will be expected to target 1.1450 & 1.1499 first, with an eventual target of trading above the highest price seen in the past 5 weeks, 1.1534.
On the other hand, if 1.1159 gives way, we need to admit that some kind of damage will happen to our long-term bullish scenario, but this scenario will not be void unless we break below the 11-year low 1.1097. In this case, potential targets for include 1.1046, 1.0998, and 1.0935 & an important long term Dow level at 1.0826. Happy Trading guys..
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