By Russell Glaser
With textbook precision the EUR/USD has completed a 61.8% retracement of the November to January move, but the weekly chart shows a sign of caution.
Following the 4Q 2010 decline from 1.4280 to 1.3456, the EUR/USD has climbed as high as 1.3760, a level which coincides with the 61.8% Fibonacci retracement at 1.3744. Since reaching this key technical barrier, the pair has shown a loss of momentum with significant selling occurring at this price.
The weekly chart displays a harami cross has formed from the two previous week’s candlesticks, a potential reversal signal in the recent uptrend. Support for the pair comes in at last week’s low of 1.3540 followed by 1.3500, as well as the January 17th low of 1.3250.
A breach above the previous week’s high at 1.3750 would be supportive of the pair with further long term resistance located at the mid November high of 1.4080, followed by the October high of 1.4280.
Forex Market Analysis provided by ForexYard.
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