Dear Roslin, Rahim, Baharun, Harizan, Sani, Wong and Rashdan. the euro surprised us with rising above Friday’s high yesterday (If you are followed the trends or obviously maybe not). This move was expected to me, and it came as a kind of not surprise to me personally. However, the adventure above Friday’s high (1.1296) was short-lived, and the price went down from a daily high of 1.1329 to a daily low of 1.1244 in less than 2 hours.
What can be noted about today’s current high is that it is only 10 pips above the micro term 71.4% retracement. The price did top at the micro term Fibonacci 61.8% on Friday, and at the micro term 71.4% retracement today. Therefore, we cannot be blamed to keep our micro term bearish bias until 1.1319 is broken with a good number of pips. This next level will be our first resistance for today.
On the other side of the chart, the rising trend line from Friday’s low is currently running very close to today’s current low 1.1239, and this will be our first support for today. We should wait for another test or break of either level in order to obtain more info about the direction of the next sizable move. Moreover, the resistance area 1.1283/95 may not be a major one, but it is capable of giving us early clues about what will happen next: a top inside this area will be a weakness sign, unlike breaking above its top. But in spite of this, the key levels for today are 1.1319 & 1.1239.
A break below the current daily low 1.1239 will be a sign that the drop from the day’s high will continue. In this case, another test of the rising trend line from June 5th low will be expected. This line is running at 1.1205, and also provides an important support. A break below this level will further confirm the weakness with a 3rd sign (topping very close to 1.1319 & breaking 1.1239 will be the first two by then). The most interesting targets for this break are 1.1145 which was almost touched on Friday, followed by 2 very important levels at 1.1103 & 1.1096, ahead of a life & death level at 1.0981. All of these levels are retracement levels, and as it is usually the case with retracements, a bottom very close to any of these levels will be a bullish sign that may be followed by a resumption of the rising larger-degree trend, while on the other hand, the bearish potential will get better & better as we break below each of them, especially if we break below the last one. If we do break above 1.0981, the medium term bullish outlook will come under pressure, and the Euro could start losing value in a strong way. The first target for breaking 1.0981 may be 1.0886, but the real target for this break is to trade below May 27th low 1.0819.
On the other hand, if the Euro is to continue moving higher, the bulls need to test 1.1282/95 the sooner the better. Breaking this area is necessary to give the bulls another chance to clear the important 1.1319. If we do break above 1.1319, there will be a good possibility to retest, and may be this time break 1.1380/92. If we break the top of this area with an enough number of pips, the price will be expected to target May’s monthly high which was seen on the 15th of the month at 1.1467. A break above this level will be expected to open the way higher towards 1.1534 & 1.1675, which make the first couple of good medium term targets.
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