Euro Trading at Support, Wait for Breakout

The Euro traded in a range against the U.S. Dollar between mid-October and mid-December. After breaking out and hitting downward resistance from the tops found in early-August, late-September, and late-December. After the last significant slide in the value of EUR/USD, from the 1.43 level, the pair returned to the confines of the range identified prior. Once again, the pair broke out of this range, in mid-March and is now trading at the resistance-turned-support line.

Trader should be cautioned that a substantial daily close below this level of support may be indicative of a free-for-all selling spree. However, one may not wish to time this trade prematurely by shorting the Euro. One may actually see the pair bounce off of this level and rise towards the larger downward sloping resistance level.



Written by Luis Gil, DailyFX Research