Monday, November 18, 2013

A resilient Euro - for now at least

After the recent reduction in Euro-zone base rates, it might be expected that it would be all down hill for the Single currency. Right now this is not the case. OmiCronFX anticipated that this would happen in calling for a retrace, albeit from a newer low brought about by the same rate cut. We have been watching Fibonacci retracement levels in this connection.

The chart above shows how the pair is, indeed, making efforts to get through the 38.2% Fib level since last Friday, on the way up. It is now on its third attempt to break this resistance. A study of the price action on the four-hour chart indicates that EURUSD is now, no matter what the fundamentals might tell us and no matter what resistance exists in the short term, in a local uptrend. This, as usual, is characterised by higher highs and higher lows. The last higher low occurred at the previous Fib level, 23.8%, and once price has passed the previous higher high, another higher high is guaranteed. All that is needed now is follow-through in order for a long trade to succeed.

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