Euro: Points of Resistance
January 13, 2011
The EUR/USD has enjoyed a tremendous rally today thanks to weaker U.S. economic data, hawkish comments from ECB President Trichet and successful bond auctions in Spain and Portugal. The rally in the EUR/USD is the strongest in nearly 3 months and has led many people to believe that the downtrend in the EUR/USD is finally over. However in order for that to happen, the currency pair needs to break a very significant resistance level that sits not far above the current price. The EUR/USD has already broken its near term support of 1.3320, the 50-day SMA and the new resistance level is now 1.3425. A break of this level is much more significant than any of the breaks that we have seen today because this is where we have the 2nd Standard Deviation Bollinger Band, the 100-day SMA, former highs and the 38.2% Fibonacci retracement of sell-off that lasted from November to January. Not to mention that the European Sovereign debt problems have not gone away. A default may not be an imminent risk, but unless you have gone long euros already, I wouldn’t be a buyer unless it dips to 1.3050 or clears 1.3450.
Posted in 2011 euro forecast, eur/usd, euro
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January 13th, 2011 at 9:10 pm
Very wise idea
January 13th, 2011 at 9:11 pm
Very wise idea
In my opinion that’s simply buyers trap to feed the selling resuming because all 2011 outlooks and analysis everywhere was ensure that the Eur/Usd will fall like coin and that was clear to all traders Like crystal.
In these certainty atmosphere you can expect the inverse like what happen MM’s like that kind of stuff a lot
Regards
January 14th, 2011 at 6:25 pm
Hey Kathy,
Nice piece of reporting. I don’t know that a standard deviation line is a point of resistance (to my mind), but everything else I agree with. That 3080 level was pivotal, and I have been long since we close above that. 1 Hour.
Just found this. I’ll be keeping up on you. Thanks.
January 16th, 2011 at 8:17 am
1.3450 break, should I assume you mean close daily? thanks. what about weekly chart? we already have a higher close from prior week?
January 17th, 2011 at 5:20 am
We’ll see… The Euro has been up to this 1.34-1.3450 are a couple of times, and has been knocked down everytime.. and preceding this recent up move it did push a new low in the high 1.28’s. I want to see if it tries one more time to push lower, if it can’t break a new low below 1.2870, I am in long. Also agree with you, if it breaks above 1.3450, buy.
Great analysis, Kathy
January 17th, 2011 at 4:28 pm
hi kathy
your articles are very usefull. all time i did see some important news here.
thanks and good job.
by
uday saj