Negative Key Reversal Week in EUR/USD Gives Bulls Pause

This year’s uptrend recently neared a 76.4% recovery level, but a sell-off last week has stopped bulls in their tracks for now, with current risk of further losses shorter term.

• WEEKLY CHART A warning to the bulls appeared last week by way of a key reversal week. This implies a better pullback could well be seen now, leaving the 1.5055 76.4% retracement out of reach.
• DAILY CHART In the FX Specialist Guide a s/term Fibo projection we had marked in was tested last week, prior to a retreat. S/term support looks to be coming from around the 1.4155 18-Apr low, which coincides with a 38.2% pullback. Failure here would imply momentum loss. Modest support is then offered by the 1.3861 02-Feb high, while key support comes from the current channel base and 1.3426 14-Feb low area. In light of the key reversal week s/term rallies may well prove short-lived.

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