Technically, the Euro is now sitting above the important support above the 24 Nov low at 1.2359 and the the 7 Nov trend low at 1.2353.
As we said previously, once these are taken out, there really is not too much to hold the Euro up until around 1.2225 (200 Month MA), which should be strong support at the first attempt. Below that is the rising trend support at the 1.2130, which is also the 50% pivot of the rally from the Euro Oct 2000 low to the July 2008 high and should also provide decent support. Under that we have the July 2012 low at 1.2041 and the June 2010 low 1.1876, which both come ahead of 1.1743, where the Euro was initially pegged to the dollar in January 1999.
On the topside, minor resistance will now be seen at 1.2400 and again at around 1.2425, and I would be doubtful of heading above here unless the ADP data (exp 221K) or the ISM (exp 57.5) are substantially weaker than expected.
Were this to be the case, the Euro would head up towards the 100/200 HMA at 1.2460 and then to the descending trend resistance, now at 1.2490. Given the negative look of the shorter term momentum indicators, I don t really see this happening, and it may well be that we have a more substantial test of the trend lows ahead of us.
As a word of caution, the DXY (88.65; chart, below) has now, more or less, reached the June 2010 high of 88.70, from where the dollar collapsed over the course of the next 12 months. I don’t think we are going to see a repeat, but raising stops on dollar long positions may not be a bad idea.
Economic data highlights will include:
EU Composite/Services PMI’s, EU Retail Sales, US ADP Employment change, ISM Non-Mfg PMI, Beige Book.
The post EURUSD: Back near important support ahead of tomorrows ECB meeting. appeared first on FX Charts Daily.
The post EURUSD: Back near important support ahead of tomorrows ECB meeting. appeared first on www.forextell.com.