On Tuesday, the Nearby euro futures contract took back its gains lost earlier in the week, giving it a solid gain for the week. As we approach the mid-point for the week, the euro appears to be poised for further upside action provided the U.S. Federal Reserve gives the market what it is looking for and Europe remains relatively stable.
Technically, the euro held a test of the August 2010 bottom at 1.2552 when it traded down to 1.2567. This price also hit a downtrending Gann angle from the 1.4925 top at 1.2565 so this area appears to be solid support this week.
On the upside, the euro has a chance at testing the resistance cluster formed by the downtrending Gann angle from 1.3515 and 50% of the 1.3515 to 1.2305 range. This potential upside target is 1.2805 to 1.2835.
Momentum will determine how high or how low this currency will move this week. The U.S. Fed Monetary Policy announcement today should have an impact, but many feel it is already priced into the market. Greece is forming its new government and Spanish bonds dipped below 7% so traders have relaxed a bit as they await the next surprise.
If there is a bullish surprise then the euro may trade straight through its upside target into the retracement level at 1.2922. A bearish surprise could trigger a 50% retracement of the short-term rally from 1.2305 to 1.2759. This downside target is 1.2532. Unless something brews in Europe, traders should look for a rangebound trade on Wednesday until the Fed sets the tone for the rest of the day about 1:05 pm Central Time.
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Euro Waiting For Next Price Trigger
Published 06/20/2012, 04:17 AM
Updated 05/14/2017, 06:45 AM
Euro Waiting For Next Price Trigger
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