Last week the Euro neutralized the bull trend by breaking both the July and November uptrend but has so far failed to extend losses. The old 1.3160 level was tested but prices have regained the Nov channel just as a 7-week cycle of lows comes in to play. Today’s rally is following a bullish doji from Friday as momentum bounces off the bullish 40 level. Having rallied back in to the Nov. range and holding the 1.3160 support level can usher a test of more formidable upside resistance. S/t, pivot lows from earlier this month at 1.3306/25 are the next upside resistance; a move to these levels would also be a test of the broken July up channel. If the Euro can rally through this zone the next tests will be a move to the sharp downtrend that has contained trade throughout February at 1.3370. Below 1.3235 starts to reassert the bearish bias. The key range for today’s tone is 1.3306 to 1.3235. Levels: Support – 1.3235, 1.3140, 1.2998 Resistance – 1.3306, 1.3325, 1.3370.
Nomura