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April 23, 2009

Technical Update for EUR-USD

EURUSD is higher at 1.3030 as the US Dollar lost a little ground against most currencies. Today sees the release of economic data that may give further clues on the need for another rate cut from the ECB.

Support & Resistance

Support at 1.2985 should hold to keep the short term uptrend intact and the outlook higher with  1.3060/70 as first, and 1.3130 as next target levels on the way up.

Resistance at 1.3150 should hold to keep the outlook bearish with 1.2750 ase the next target on the way down.

Bears have managed to contain price action below the retracement zone and the 200DMA to remain in medium-term control. The latest break under the 61.8% retracement of the latest up-swing should now increase optimism for a retest of 1.2834, which shields the key lows between 1.2455 and 1.2328.

Oscillators are pushing into over-sold territory but show no sign of an immediate reversal (or corrective bounce). Only a recovery above 1.3581 would start to question the latest decline for another attempt at the 200 DMA and the high at 1.3737. However, only above the latter would change the medium-term outlook for EUR/USD.  Below 1.2328 would resume the down-trend towards 1.1832.

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