EUR/USD Technical Highlights:
- EUR/USD burst higher quickly reversed
- Near-term swing level stands in way of March lows
The EUR/USD is coming off hard after trying to reverse trend last week. The sharp reversal back to the downside has in play the notion that we will see the March lows retested at the least, if not worse. This would be in-line with the broader trend lower dating back to the Jan 2021 high.
In the short-term there is minor support at 10944, a level that kicked off the spike higher last week. It isn’t a highly significant level outside of the short-term, but a focal point to keep an eye on. We may see an initial bounce develop from that point, even if the Euro is to continue to break lower.
A breakdown below 10944 will have an unproven bottom-side slope in play, it’s a parallel that ties in with the slope across the three peaks created during March. We may or may not see much of a reaction there, but just below the parallel lies a very important low.
The March low at 10805 is a big one not only because of how hard the Euro bounced, but because it was the first confirmation of the trend-line dating to December 2016. It connects with the 2020 low, which is obviously an important one given the driver at the time.
Should the Euro sink to that point look for a reaction to develop. It could offer a counter-trend trade for those looking to fade a move into a major level. For now, there is the 10944 level to focus on the in the short-term as a potential near-term inflection point.
EUR/USD Daily Chart
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
