EUR/USD stalls decline around 200-day moving average
James Chen May 13, 2013 6:04 PM
<p>May 13, 2013 – EUR/USD (daily chart) has stalled its decline just under the key 1.3000 support/resistance level, which also currently happens to reside around […]</p>
May 13, 2013 – EUR/USD (daily chart) has stalled its decline just under the key 1.3000 support/resistance level, which also currently happens to reside around the important 200-day moving average. The current decline occurs after a bullish correction that brought the price up in the beginning of the month to hit the 50% Fibonacci retracement level (around 1.3240) of the prior bearish trend from the 1.3700-area high in early February to the 1.2750-area low in late March and early April. The subsequent decline from the 50% level formed a rough head-and-shoulders reversal pattern that broke down late last week to arrive at its current position below the 1.3000 support.
Having reached down to the 200-day moving average in the process, the price is at a critical juncture. Further declines below 1.3000 and the moving average should target a re-test of the support lows around 1.2750-1.2800, with a further major downside objective around the 1.2650 level, to potentially continue the entrenched downtrend.
GAIN Capital UK Limited (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.