Last month at time of writing EUR/USD was at 1.1005. As I write this now it closed Friday at 1.0884 so I guess the bullet point above was right but as you can see from the Daily Chart above that is not the full story.
The full story has been Super Mario Thursday and to a lesser extent the follow on that happened on Non-Farm Payroll Friday. SM Thursday itself produced a superb Key Reversal Up Pattern following a Bullish Outside Day on the previous Wednesday so we could argue that the move up actually started on the Wednesday.
However, there are some issues – the rally on SM Thursday did not manage to break significant resistance levels made up of 1.1017 (recent key 50% Fib), 1.1033 (Long MA), 1.1063 (Medium MA) and 1.1125 (next significant Key 50% Fib). It didn’t even come close! Then on NFP Friday we saw the market rejecting any try higher and closing lower. If we do not have a significant try at the previously mentioned resistance levels – and soon - then we may see prices head back down and test the key support for this move up, the key 50% Fib at 1.0760.
The one advantage this support area has is its proximity to the Sep 2003 low at 1.0757 which ‘might’ add further ammunition to the bull case. So, these are the key levels, a band between and 1.1017 – 1.1125 on the upside and 1.0760 – 1.0753 below. With now three out of four MAs still heading down rather than the full complement therefore I feel obliged to add a question mark to the bearish bullet point above.
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