EUR/USD Retreats and Pulls Back to Key Support

<p>EUR/USD (daily chart shown below) has retreated after advancing within the past month to reach a three-month high of 1.1465 late last week. Since mid-April, […]</p>

EUR/USD (daily chart shown below) has retreated after advancing within the past month to reach a three-month high of 1.1465 late last week.

Since mid-April, the currency pair had been rebounding from a rough double-bottom chart pattern around the 1.0500 support area. This chart pattern occurred after a long and sustained bearish trend from the 1.4000-area high in May of last year down to mid-March’s new 12-year low of 1.0461.

The rebound from those lows lifted EUR/USD above key resistance levels, including 1.0800 and 1.1100, as well as the important 50-day moving average. A month-long rising trend line was also formed.

2015-05-20-EURUSD daily chart


This week, on renewed dollar strength, the currency pair has dropped below the rising trend line and pulled back down to key support around the noted 1.1100 level.

Any further drop below 1.1100 could begin to re-assert EUR/USD’s bearish trend, with the next major downside target back down around the 1.0800 level. To the upside, any rebound from support should be limited in the short-term by the 1.1400-area resistance.

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.