Euro technical analysis courtesy of Cantor Index
For more interesting research & professional Technical Analysis from Cantor Index click here to register for free.
Thurs, January 17, 2013
Euro Monthly chart
Last Updated, January 16th, 2013
The euro monthly chart above shows how the currency has had a relatively strong performance over the past decade despite the wider concerns in the past few years.
Retracement levels can often prove useful in FX trading and the lines calculated from the 2000-2008 highs seem to have caught much of the price action, red lines. The sell-off in 2010 for example, and the moves lower last year, found support off the 1.2134 area, the 50% level.
So for the longer term the outlook on euro looks strong while this 50% level holds. As a result any moves down to this area would be seen as attractive longer term entry levels. Breaks under this major long term support would open up moves down to the 61.8% retracement, and even start to suggest more serious full scale retracement back towards the 0.8233 lows.
The last rally off the 50% level has been enough to lift the euro out of this natural retracement consolidation area, trading above 1.3055. This opens up an increasingly positive outlook for H1 2013, with moves up towards the 1.4 seen possible. However due to the bearish phase over the past 4 years we would see gains on any such longer term leg higher capped around the 1.4 areas. Closes back under 1.3055 would be needed to negate this relatively optimistic long term outlook.
Euro Weekly Chart
Moving down to the weekly timescale the outlook is also optimistic, as the price action has broken its medium term bearish trend, diagonal red line, and has moved up to its 50% retracement line calculated from the 2010 lows and 2011 highs.
Over this period it also has set up a strong bullish trend, black line. Price action above this trend keeps a bullish outlook on euro, with 1.3734 the initial targets for this buying. Traders could use the price trend line break as a signal that this optimistic view had been negated, and also monitor the RSI trend line as confirmation.
Euro Daily Chart
Comments (0)