Hi dears and followers, the Euro rose as expected yesterday, before topping extremely close to the micro term 85.7% retracement when it reached a daily high at 1.1499, only 2 pips below our level. This is not the first time the 85.7% shows its magic this week, as the price bottomed only 3 pips above the previous move’s 85.7% on Wednesday, when it reached a low of 1.1304. It is very satisfying to me personally to see the price changes direction, and creating turning points this close to the levels I have discovered, but when this happens at level support, then at level resistance it is not very helpful in determining the short term trend.
As it is the case with all retracements, stopping at a retracement level support is usually a bullish sign, and stopping at a retracement level resistance is usually a bearish sign, but when the price stops at both support & resistance retracements, we cannot say the direction is one or the other with a good degree of certainty. In such cases, a break of other levels is needed before we can take sides in this fight between the bulls & the bears. So, let us focus on these levels.
First support is provided by the rising trend line from Wednesday’s low, which is currently running at very close to the current daily low 1.1441. A break below this level would open the way lower, but the price will still be expected to find support at one of the micro term retracements at 1.1425, 1.1402, 1.1378 & 1.1360. A break below all of these levels is not expected under the current outlook, but testing at least one of them will become highly probable once the price breaks the current daily low 1.1441. My favorite of those levels is 1.1402, where the bulls could consider buying again. Breaking below 1.1360 is not probable, but in case this small surprise happens, the price will be expected to target another test of 1.1301, ahead of other retracement levels at 1.1284, 1.1264, 1.1222 & 1.1159.
As for the resistance, first we have the micro term 85.7% at 1.1501, which was tested yesterday with fantastic accuracy. A break above this level would confirm the price’s ability to reach higher than it did on Tuesday (1.1534). In this case 1.1569 & 1.1596 make very good targets, ahead of 1.1697.
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