TRADERWORX.COM – Extensive weakness in EURUSD on Monday eventually failed to cement the latest push lower, as the single currency nudged back atop of 1.35 into the close late in NY. That said, little worth noticing at current (10.58GMT – EURUSD at 1.3522, Dhigh at 1.3547, DLow at 1.3461), as the pairing was due for a bit of consolidation following a three consecutive session losing streak. We are still backing the buy the dips approach we mentioned extensively in yesterday’s piece of analysis (see below).
Technically, there’s room for further recovery, although the EUR is far from being out of the woods as hurdles are still numerous.
A strong area of congestion looms between 1.3540-72, where previous (intraday) attempts were contained. Inside this area, there are smaller layers of resistance to be found at 1.3558 (Mon’s high) – 1.3560 (Fri hourly level). A clearance of this 1.3540-72 area would however bode well for additional recovery. Our model would be a buyer of such a breakout (one hourly close above the level is a necessity for entrance), for a return towards 1.3650-60 at least (Feb 2 – Feb 10 downtrend resistance level). Interim resistance still at 1.3583 (Fri Feb 11 high), 1.3600 and 1.3640-50. Above the latter sets targets at 1.3744 (Feb 09 high).
Conversely, a failure to regain composure above 1.3572 could see the recent recovery fading and slipping back towards 1.3461 (Intraday low). Below here opens for a test of Monday’s lows at 1.3429 and eventually for the short-term key support zone near 1.3370-65 (previous trendline + Fibo level). As expressed in our Monday’s piece of analysis, we keep our ‘buy dips’ approach standing as prices hold above this latter area.
Summarizing; before suggesting the ongoing recovery off Monday’s lows has potential to reverse the recent day’s weakness, we would like to see strength as expressed by a cemented break above 1.3572. Repeated failures to do so will likely see renewed slippage back towards the day’s lows (1.3461), followed by Mon’s 1.3429. Fresh stops are expected to be triggered below here, and moves sub 1.34 are until further notice believed to offer bargain hunters a nice opportunity.
Remark: The analysis provided is based on technical research and proprietary models made by Traderworx Limited. It is intended for general information purposes only, and should not be used as a trading guidance, unless fully at own risk. Trading FX or leveraged/margined assets contains a high degree of risk and substantial risk of loss.
