The Euro has reached a key retracement level of its 2009 rally. At the moment, this 38.2% level is a support to watch.
EURUSD retraces 38.2% of 2009 movement
2 conditions give us a clue to whether the the Euro will rally from here or continue on its downtrend in the daily chart. A downward trendline now prints its resistance. As long as the trendline is not violated, the EURUSD will continue to retreat against the Dollar.
But there is another level to watch.
1.4216 is December 2009 low. Based on current price levels, 1.4216 will become a resistance and it comes before the downward trendline meaning that bulls and bears will be fighting this level first. If this resistance is breached convincingly in the near future, the technical picture of Euro may change. This outcome will make price movement below 1.4216 a ‘bear trap’ so that a downward wedge with bullish implications will form.
Critical level in Euro decides downtrend or bear trap
