Just How Big of A Deal is This Recent EUR/USD Decline?
- EUR/USD reverses sharply from key long-term resistance zone
- Bigger top developing?
Unfamiliar with Gann Square Root Relationships? Learn more about them HERE.
EUR/USD has had a very difficult time penetrating the top end of an important Fibonacci confluence zone that rests between 1.3830 and 1.3970. This zone is important because the 50% retracement of the 2008/2010 decline, the 61.8% retracement of 2009/2010 decline, the 61.8% retracement of the 2011/2012 decline and the 127% extension of the 1Q13 decline all converge there. In their own right each one of these levels is probably important enough to prompt a reversal of some importance, but together they demand a lot more attention. Last week’s failure coupled with the aggressive weakness witnessed over the past couple of days in the exchange rate warns that a top of some importance has likely been recorded. The near-term cyclical picture looks positive for a few days, however, and we like selling into any strength that develops during this period.
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EUR/USD Daily Chart: March 20, 2014
Charts Created using Marketscope – Prepared by Kristian Kerr
Key Event Risk in Coming Sessions:
LEVELS TO WATCH
Resistance: 1.3825 (Gann), 1.3855(Fibonacci)
Support: 1.3730 (Gann), 1.3710 (Gann)
Strategy: Sell EUR/USD
Entry: Sell EUR/USD at 1.3855
Stop: 1-day close above 1.3930
--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
To contact Kristian, e-mail email@example.com. Follow me on Twitter at@KKerrFX.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.