The Euro is building a negative technical picture starting with the trendlline break from the July lows. That break coincided with a failure to hold key support at 1.3170/60. Now the gains for the year have been erased and a large topping pattern has taken shape that further strengthens the bear case. One positive is a minor bullish divergence between price and momentum which suggests a minor bottom ahead. (ch1) S/t, the down channel from February has so far contained this sell-off, one that has been marked by a fair amount of overlapping trade. The a-b-c zig-zags have shown clear symmetry as well and offer a new downside target at 1.2944. Below 1.2944 the next cluster of Fibo support is 1.2883/66. On the upside, a move through 1.3150 will be key resistance therefore a close through this level will be a sign of further gains ahead. (ch1) Levels: Support – 1.2998, 1.2944, 1.2883 Resistance – 1.3018, 1.3050, 1.3306.
Natixis