EUR/USD Technical Analysis

Euro/Dollar had a rough start to the week, falling below 1.40. It later recovered nicely and gradually climbed in range, breaking above the 1.4160 line (discussed last week).

Technical levels, from top to bottom:

Hi in the sky, 1.4882 has been a distinct cap. Below – 1.4775 was the support line of the tight range trading. 1.47 is a rather minor line, that only temporarily capped the pair on its way up.

1.4650 was a peak on the way up, and then switched to significant support. It is a rather far as well 1.4580 was a line of resistance in the short stabilization period in the past week, and also in mid-April, and is a strong line of resistance now.

1.4520 was the bottom border of that range and an even stronger line, as it already worked as tough resistance a few weeks ago. Minor resistance is at 1.4450, which was an important line in the past, and had different roles beforehand.

1.4375 provided support a few weeks ago, and held the pair for a short period of time before the final fall. It returns to having a major role, as it is getting closer. The peak of November 2010 at 1.4282 managed to temporarily cap the pair’s rise, but it is a weak line.

1.4160 was a swing high in the past, and also a swing low a few weeks ago, before the big surge to higher levels. It was shattered in the past weeks and remains a pivotal line now. Just above the round number of 1.40, we find very important support at 1.4030 – this is a very distinctive line, as seen in the graph.

Lower, 1.3950 was a pivotal line when the pair traded in lower ranges and proved that it is of high importance. The fall of the pair stopped short of reaching this line just now. Another significant support line is at 1.3860, which worked in both directions earlier this year.

1.3570 worked as support at the beginning of the year, and will have the same role if the Euro falls that far. The last important line is 1.3440, that is very distinctive. It was a clear border between ranges, more than once in recent years. A break below will be a very bearish sign.

I remain bearish on EUR/USD.

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