RSI Trend and 61.8% Fibo Offer Support for EUR/USD
Chart prepared by Christopher Vecchio using Marketscope 2.0
FOREX Analysis: The EURUSD sliced through support at $1.3070/80 (38.2% Fib July 2012 low to February 2013 high [blue line], 50% Fib April low to June high [red line]) easily today, and now finds itself at the 61.8% Fibonacci retracement of the April low to the June high [red line] at 1.3000. The psychologically significant figure serves as a reasonable area to look for a short-term low, further suggested by the daily RSI falling to trend support (February 25 and May 17 RSI lows).
FOREX Trading Strategy: The trend is down and therefore playing countertrend moves (rallies) is best avoided; given volatility, bounces can be more shallow than desired and lead to quick losses. Accordingly, I’d look into 1.3070/80 (38.2% Fib July 2012 low to February 2013 high [blue line], 50% Fib April low to June high [red line]) for resistance for the next short opportunity.
--- Written by Christopher Vecchio, Currency Analyst
To contact Christopher Vecchio, e-mail email@example.com
Follow him on Twitter at @CVecchioFX
To be added to Christopher’s e-mail distribution list, please fill out this form
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.