The EUR/USD broke out of its downtrend this month and has risen sharply over the last two weeks as the USD has been hammered by news from the US Federal Reserve. As we wait for a new and tradable trend to emerge, we are closely watching new short-term support and resistance levels (chart below).
Fibonacci retracement levels are anchored from the top to the bottom of a recent trend. They give us insight into potential levels of support and resistance. Your dealer's charting application should have fibonacci tools available to you.
Be sure to check out Using Fibonacci Analysis first if you aren't familiar with using Fibonacci studies in your trading.
In the chart below, we're using the spike in December as our top anchor point, and the recent low in March at around the 1.25 level.
Once we do so, we clearly see the 61.8% Fibonacci level as a strong resistant point for the pair. This week we've seen the EUR/USD bump that level and draw back toward the 50% level three times.
Get free trading ideas and analysis with our email Newsletter
The pair is consolidating in that range, and if we see a solid break through support, we can expect the pair to move down toward the next likely point of support at the 1.325 level, while a break of resistance would push the pair toward the next level of resistance, all the way at the 1.44 level.
Read/Post Comments
