By Russell Glaser – The long term downward sloping trend line is being tested after the euro appreciated versus the dollar. The rise in the pair coincides with the release of the EU rescue package for Greece. The daily chart below shows to what price the pair could appreciate to following the euro positive news.
The EUR/USD daily chart below shows the current long term downward sloping trend line for the pair. This trend line is being tested after last nights sharp appreciation in the pair.
There are a number of ways to detect a shift in the trend. Besides a breach of the trend line, traders can use retracement levels. The Fibonacci retracement level of 50% has already established itself as a significant resistance line in May, June and July of last year during the uptrend, as well as mid March during the downtrend.
While I remain bearish on the euro in general, the price target of 1.3800 for the correction seems probable in the near term.
Forex Market Analysis provided by Forex Yard.
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