The EUR/USD began the U.S. session near the 38.2% retracement level of the decline from the November high, at 1.05628. After an initial reversal to the upside, the pair climbed toward the swing area between 1.05926 and 1.06097, peaking at 1.05937 before sellers regained control. Resistance held firm, and the price has since retreated.
The focus now shifts back to the 38.2% retracement at 1.05628 as a key support level. A break below this level would bring the 100- and 200-hour moving averages, both near 1.0543, into play. Further declines could target the 100-bar moving average on the 4-hour chart, which sits at 1.0531.
If these levels are breached, it could open the door for additional downside momentum and further probing lower.
For now, buyers and sellers are respecting key support and resistance levels, setting the stage for potential breakout moves. Until then, trading within these levels remains the focus.
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The technical cheat sheet for the EURUSD
EUR/USD Technical Analysis
Market Summary
The EUR/USD pair began the U.S. session near the 38.2% retracement level of the decline from the November high. After an initial reversal to the upside, the pair peaked at 1.05937 before sellers regained control, causing the price to retreat.
Key Technical Levels
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38.2% Retracement: 1.05628
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Swing Area Resistance: 1.05926-1.06097
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100-hour MA: 1.0543
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200-hour MA: 1.0543
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100-bar MA (4-hour chart): 1.0531
Market Sentiment
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Buyer-Seller Balance: Buyers and sellers are respecting key support and resistance levels.
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Breakout Potential: A breakout above resistance or below support could trigger additional momentum.
Trade Implications
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Buyers: Need to maintain prices above the 38.2% retracement level and target a break above the swing area resistance.
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Sellers: Will attempt to defend the swing area resistance and push prices below the 38.2% retracement level to gain control.
This article was written by Greg Michalowski at www.forexlive.com. Source