By: Colin Jessup
I last wrote about the Euro on August 23 and stated that I believed the Euro was setting up for another bullish run...and depending on what news comes out of the USA's FOMC and Consumer Price Index, I think this could still hold true. We did indeed see price bounce off of the support zone at 1.4325 as well as the EMA 62, 2 days after my last post on the topic, but the currency was unable to hold above the resistance level at 1.4500 and therefore could not turn it into support.
On a daily chart we have now broken through, and closed below the daily support level of 1.4300. Plus, we have closed below the EMA 62 which has basically been sideways since May. The next daily support zone is at 1.4185 with minor support at 1.4150 and then another daily zone at 1.4080. Watch these levels closely as they are key to where the Euro could be headed.
If the Greenback gets some support from the previously mentioned announcements today, we could see the Euro reverse. If price breaks back above 1.4300 and holds above it we may return the reins to the bulls. However I wouldn't consider this pair to BE bullish again until we break and hold above 1.4500 which is a major resistance zone for the pair.
Happy Trading!