EURUSD hits major Fibonnacci level

EURUSD Weekly Technical Analysis.

A tough week for the dollar has culminated in EURUSD hitting the 61.8 Fibonacci area coming from the major down wave 1.6035 – 1.1187.  This Fib retrace level comes just below the psychological round number 1.4500.

The weekly candle close is marginally above the level but this could yet prove to be major resistance as it is typically the strongest Fibonacci level in my opinion.   However,  the recent bullish price action necessitates a high quality price action reversal signal if a counter trend position is to be taken.

A more favourable strategy, for trend traders,  could be to wait for price action confirmation on any suitable pull back to the 1.4250 area. This is previous resistance and could potentially become support.  In terms of correlations the dollar index has broken through recent support which also suggests more upside potential for EURUSD.

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