Hi dear friends especially for Yazid, Baharun and FXP Group,through my observation the Euro’s very strong reaction to breaking the falling trend channel from May 15th top continued, as the single currency reached a 17-day high at 1.1380 earlier today. A look at the attached chart shows that this high is very close to yet another level: the fibo 85.7% retracement at 1.1374.
This is not the first time during this rising move that the price has stopped very close to my expectation levels as mentioned earlier: On Tuesday, the price topped at 1.1193 only 4 pips above the short term fibo 57.1%. On Wednesday, the price topped at 1.1285, only 3 pips above the short term fibo 71.4% retracement. Today, the price topped at 1.1380, only 6 pips above the short term fibo 85.7% retracement level. Although I was very excited about breaking the top of the falling channel from May 15th, and was bullish on Euro for many reasons, but mainly for this specific reason, it is hard to neglect topping with this kind of accuracy at retracement levels for 3 days in a row! Therefore, if the Euro fails to break above 1.1374 in a clear & clean way, we may be about to see it retreat from these high areas.
First support is at 1.1344. Although this level is a minor one, breaking below it (especially if it comes after topping with the daily high still reasonably close to 1.1374) will be a first sign that we may have topped after rising 494 pips from Monday’s low. Other levels that will help us determine if the price is going to start dropping or not are 1.1305 & 1.1272. Bottoming very close to either of these levels will not help the weakness scenario, but breaking below each of them will. If we break below 1.1272 the price will be expected to target at least one of the short term retracement levels, which start with a minor fibo level at 1.1239, ahead of the first Fibonacci level at 1.1191. Below here, way may target any of the 3 most important retracement levels at 1.1133, 1.1075 & 1.1027. It is highly unexpected to see the Euro break below all of these levels, but testing one or more of them will become highly probable once we break below 1.1344.
On the other hand, the resistance is at 1.1374. A break above this level will seriously boost the medium term outlook, and will make it reasonable to expect for the price to be able to move beyond the latest top (1.1467), and in this case 1.1534 & 1.1675 make the first couple of good medium term targets.
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