By Russell Glaser – Now that the EUR/USD has closed above a retracement level from the December 2009 high, a bearish sign has developed on the daily chart. This may allow for a consolidation pattern to form or a worst case scenario a reversal of the uptrend.
A close above 1.3890 the 61.8% Fibonacci retracement was a significant milestone in the recovery of the pair. Now that this technical barrier has been achieved, new resistance levels are found.
Resistance should be located at the December 2009 lows near 1.4210 (R1) and the mid-January high of 1.4580 (R2).
Support for the EUR/USD will be found at the March high of 1.3820 (S1).
Today the EUR/USD pushed as high as 1.4028 only to lose those gains and fall as low as 1.3856. The pair has come back and is currently trading at its opening day price.
This could be a bearish signal. If the price closes at its currently level, the daily candlestick will form a longed legged doji which may signal a pause in the uptrend or at the worst a reversal.
Forex Market Analysis provided by ForexYard.
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