EUR / USD – Wants to Return to Old Ground Back at 1.31

The Euro fell sharply late last week as it moved from the strong resistance level around 1.31 back down towards 1.29.  The 1.30 level could have been expected to provide some support having previously been a strong resistance level only a week or so earlier, however the Euro fell right through it.   Over the last 48 hours, the Euro has been well caught by another level at 1.29 which has provided sufficient demand to not only temporarily halt the fall, however provide sufficient support to allow the Euro to bounce back to 1.30.   Prior to this fall over the last week, earlier last week the Euro surged through the significant key level at 1.30, however as expected, the previous resistance levels around 1.30 and 1.3150 loomed large with the former creating a brick wall and forcing the Euro back. This surge higher however resulted in the Euro trading at a seven week high around 1.3125.

During last week, the Euro placed pressure on the resistance level at 1.31 however it held firm with excessive selling around the level. This has resulted in the Euro falling the last week or so back to two week lows a little below 1.29.   Now that it has broken up well from the 1.29 level, it is likely to meet some selling pressure at its present trading level around 1.30.    If it was able to rally further and move beyond the resistance levels at 1.30 and 1.31, the previous resistance around the 1.3150 area would likely play a role again and may place some doubt into the minds of buyers, yet again. (Daily chart / 4 hourly chart below)

EURUSD Technical Analysis Daily Chart.

daily chart

EURUSD Technical Analysis Candlestick 4 Hour Chart.

4 hourly chart

EUR/USD

   Dec 11 at 21:55 GMT
1.3004 / 05    H: 1.3015    L: 1.2939

 

S3 S2 S1 R1 R2 R3
1.2900 1.2800 1.2700 1.3000 1.3100 1.3150

EUR/USD Long - Short Ratio

(Shows the ratio of long vs. short positions for the EUR/USD. The left percentage (blue) shows long positions; the right percentage (orange) shows short positions.)

EUR/USD Technical

  • During the early hours of the Asian trading session on Wednesday, the Euro is consolidating just above 1.30 after having previously edged up above.
  • The 1.30 level emerged as a key level last month having shown solid resistance for the Euro and this level has emerged again with the Euro dealing with this level presently.
  • There are now several levels likely to offer support over the longer term should the Euro ease off from its present trading levels. Eg. 1.29, 1.28, and 1.27.
  • Current range: Just above 1.30 around 1.3005.

 

Further levels in both directions:

  • Below: 1.2900, 1.2800 and 1.2700.
  • Above: 1.3000, 1.3100 and 1.3150.

 

December 12

  • UK 9:30 (GMT) ILO Unemployment Rate (Oct)
  • CH 10:00 (GMT) Credit Suisse ZEW Survey (Dec)
  • EU 10:00 (GMT) Industrial production (Oct)
  • US 17:30 (GMT) FOMC - Fed Funds Rate (Dec)
  • US 19:00 (GMT) Budget (Nov)
  • US 19:15 (GMT) Fed Chairman Bernanke to give press conference following FOMC Announcement

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This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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Stuart McPhee

Stuart McPhee

Senior Currency Technical Analyst at Market Pulse
Stuart McPhee has nearly 20 years’ experience as a private trader and he specializes in technical market analysis of major currency pairs. He is the author of several bestselling trading books, most recently the fourth edition of his popular book “Trading in a Nutshell” (John Wiley), and he contributes articles to daily newsletters and blogs. He produces articles and videos on the how-tos of technical trading. Living in Melbourne, Australia, Stuart speaks at conferences and events worldwide.
Stuart McPhee