EUR/USD Recovery Off 61.8% Support Feeble So Far

The FX Trader’s view - We last looked at EUR/USD when the downmove was approaching a 61.8% retracement/ support level. It has proved effective in halting the bears but there has so far been a lack of enthusiasm to push through first key resistance and set in motion a better recovery phase.

• WEEKLY CHART: The reversal in trend at the 76.4% recovery mark saw a steady decline to the 61.8% pullback level around 1.3400, which has provided nice s/term support. But a failure to push through first key resistance (see below) would turn our focus towards the lower 76.4% just under 1.3000.
• DAILY CHART: The s/term chart structure had previously started to suggest that bears were getting weary on the approach to 61.8%. However, in the FX Specialist Guide we have been looking at the 23.6% retracement area, at 1.3835, as first key resistance. This needs to be overcome in order to signal a better s/term recovery can be seen. In which case tough resistance would be expected at/below the 1.4216 Dec-09 low. Meanwhile the Mar low and 61.8% level stay vulnerable – note that there is currently an interesting Fibo projection (not shown) that nicely coincides with the 76.4% level just below 1.3000…

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