EUR/USD rebounds from support lows
James Chen April 16, 2015 7:49 PM
<p>EUR/USD (daily chart shown below) has rebounded off a major support low just above the key 1.0500 psychological target. That low of 1.0519 was hit […]</p>
EUR/USD (daily chart shown below) has rebounded off a major support low just above the key 1.0500 psychological target. That low of 1.0519 was hit early this week and came close to retesting the new 12-year low of 1.0461 that was established just a month ago in mid-March.
This week’s near-retest of the 1.0500 support target occurred after the currency pair broke down below a large triangle consolidation pattern last week.
Despite the current rebound from support, EUR/USD continues to be securely entrenched within a powerful downtrend that has been in place since the 1.4000-area high in early May of last year, almost one year ago.
Within this downtrend, the 50-day moving average has consistently served as reliable resistance against all rebound rallies thus far. In the event that the current rebound extends to break above this key moving average, the well-established 1.1100 level should serve as strong resistance potentially limiting further upside.
With the ongoing bearish trend still firmly in place, major downside targets in the event of an expected downtrend continuation remain at the 1.0500 and then 1.0200 support levels.
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