By Fast Brokers – The EUR/USD tested 1.23 today as the currency pair benefitted from a broad-based risk rally. However, as of yet the EUR/USD hasn’t overcome any meaningful technical barriers despite today’s huge gains in U.S. equities. Therefore, uncertainty continues to weigh on the F X markets and the EUR/USD will likely need a substantial psychological or fundamental development to turn the tide. Unfortunately for the EUR/USD, the EU has little data on the wire today, meaning the currency pair will be in the hands of psychological forces along with America’s advance employment data. The U.S. and UK will also release their respective services PMI figures, meaning the EUR/USD will likely just play along with its risk correlation. However, investors should still keep an eye on the news wire since these days it is wise to expect the unexpected from European countries which faces extraordinary fiscal pressures. Meanwhile, no news is good news and allows investor uncertainty to subside as the EUR/USD tries to build a base above 1.20.
Technically speaking, the EUR/USD faces technical barriers in the form of mounting downtrend lines along with 6/1 and 5/28 highs. Additionally, the 1.25 level could serve as a strong resistance should it be tested. As for the downside, yesterday’s break below May lows could prove to be an important technical event for the near-term. The EUR/USD has supports in the form of 6/1 lows and the highly psychological 1.20 area.
Present Price: 1.2285
Resistances: 1.2284, 1.2304, 1.2320, 1.2344, 1.2373, 1.2386, 1.2412
Supports: 1.2268, 1.2251, 1.2232, 1.2221, 1.2208, 1.2196, 1.2176
Psychological: June 2010 lows, March 2006 lows, 1.22, 1.20
(click chart to enlarge)
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