VOT Research Desk
Euro refreshed technical exchange levels – Every day and Intraday Outlines
EUR/USD turns around pointedly off downtrend opposition on hot US CPI-risk for enunciation into equality
Support 9991-1.0000, 9920s, 9901 (basic) – Resistance.0175 (key), 1.0260, 1.0352/85
Following a hotter than expected US inflation reading, the euro fell more than 1.5% off its weekly highs versus the dollar today, with EUR/USD reversing strongly off major technical resistance. Parity is once again in focus as a result of the pullback, and we’re waiting for a potential price inflection on a stretch lower. On the technical price charts for EUR/USD, these are the latest goals and invalidation levels that are significant. Check out my most recent Strategy Webinar for a detailed analysis of this Euro technical setup and other topics.
Technical Examination:
The Euro fell to Fibonacci support at the 78.6% retracement of the larger 2000 surge at 9901 with price recording the yearly low-day close at 9902 at the beginning of September before rapidly reversing upward, as we noted in last month’s Euro Short-Term Price Outlook.
The recovery was stopped early in the week at confluent downtrend resistance near the 61.8% retracement of the August slide at 1.0175. The July low-day close and parity are being approached by the price as a result of today’s CPI reading, increasing the likelihood of a price inflection into this area.
When looking at the price action of the Euro, it can be seen that the EUR/USD pair is now trading within the boundaries of a short-term ascending pitchfork formation that extends from the lows of August and September, with the upper parallel squeezing the rally into the weekly open.
The initial support for today’s reversal is set at 9991-1.0000 and is supported by the lower parallel (now in the 9920s) and the 99-handle.
Today’s reversal has already broken below the objective weekly and monthly openers. In the end, a break or close below this significant level will be required to signal the continuation of the broader downtrend and to ignite the following leg lower. Failing to do so would risk a fall towards the lower parallels and the June 2000 high at 9701.
The euro has turned about at a crucial resistance confluence, and a further decline
Remains possible while below 1.0175. From a trading perspective, if price is moving lower on this stretch, look to minimize sections of short exposure and lower protective stops. Rallies should be capped by the monthly high-day close (1.0121).
