EUR/USD rebounds towards resistance

<p>EUR/USD (daily chart shown below) has continued its rebound towards key resistance at 1.1100, a prior support target, which is also where the 50-day moving […]</p>

EUR/USD (daily chart shown below) has continued its rebound towards key resistance at 1.1100, a prior support target, which is also where the 50-day moving average is currently situated.

For the past week and a half, the current rebound has lifted the currency pair off its new 12-year low of 1.0461 that was established in mid-March. That low dipped only slightly below the major 1.0500 support target.

After that low was hit, EUR/USD quickly began a rebound in the middle of March that was buoyed further by the US Fed meeting on March 18, which resulted in a quick plunge in the US dollar. That EUR/USD rebound hit a high of 1.1037 on the day of the Fed meeting before retreating modestly during subsequent trading days.

2015-03-25-EURUSD daily chart


Currently, although it has regained much of its rebound strength, the currency pair is still entrenched in a strong downtrend that has been in place for the past ten months, since the May 2014 high near 1.4000.

If upside momentum is able to break above the noted 1.1100 resistance and 50-day moving average, the next major resistance on an extension of the current rebound resides around the 1.1400 level.

To the downside, any turn back down from resistance on a resumption of the entrenched downtrend should likely re-target the 1.0800 and 1.0500 support objectives once again.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.