EUR/USD Rises to Resistance on Dollar Pullback
James Chen June 18, 2015 7:13 PM
<p>EUR/USD ( daily chart shown below) has risen to key resistance around the 1.1400 price area Thursday on a sharp US dollar pullback prompted in […]</p>
EUR/USD ( daily chart shown below) has risen to key resistance around the 1.1400 price area Thursday on a sharp US dollar pullback prompted in part by Wednesday’s US Fed statement and press conference.
In the process, the currency pair has established a new one-month high and has approached the 1.1465 peak that was reached in mid-May.
Despite having just risen to re-test and tentatively breach the noted 1.1400 resistance area, EUR/USD is currently still entrenched within a major bearish trend that extends back to last May’s 1.4000-area high and which culminated thus far in March’s 12-year low of 1.0461.
After that low was established, the pair spent much of April and May rebounding from a rough double-bottoming pattern around the 1.0500 support area.
Since late May, EUR/USD has continued its rebound by rising from the major 1.0800 support level as US dollar strength made a general retreat.
While the currency pair has continued to show strength for the past several weeks, it currently continues to trade squarely between two major moving averages – the 200-day to the upside and the 50-day to the downside. This places it at a critical directional juncture.
Any sustained trading above 1.1400 and continued rebound momentum should be limited by the next major resistance to the upside at the 1.1650 level.
On any retreat from the current resistance area, downside targets to potentially resume the currency pair’s bearish trend bias continue to reside at the 1.1100 and 1.0800 support objectives.
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