Euro / Dollar Technical Forex Analysis for Forex Traders

Although the Euro broke the support specified in yesterday's report 1.2256, and fell afterwards by 80 pips, it came back to break the resistance specified in the report (opposite to our expectations), and traded above it after the American closing, but it was not ale to hold this high! This strong bounce, did not break any important levels (so far), to the degree that we can say that the negative technical outlook has changed. When analyzing the 4-hour chart, we can see a beautiful channel, with the price trading in the middle of it at the moment. We can also see that the whole movement of yesterday was in the middle of this channel, and it did not touch or even approach the top or the bottom of the channel. The fact that Fibonacci 61.8% is at the same level as the top of this channel, at 1.2481, makes this level very important. We do not see any reason to change our negative technical outlook for as long as the price is below it. As for the short term the support at 1.2256 has gained more importance after Fibonacci 61.8% for the short term has moved towards it exactly. Breaking this support will drop the Euro to the same target set for yesterday: 1.2142 first, then 1.2000. The resistance is at 1.2301, and breaking it indicates a continuation of the rising correction with its ideal targets between 1.2365 & 1.2481. It goes without saying that the latter is the single most important resistance for the time being, and the separating point between a continuation of the current downtrend, and a reversal to an uptrend! We still believe, we still believe that the drop to a new cycle low below 1.2142 is only a matter of time, nothing will change that except for breaking 1.2481.

Support:

1.2256: Fibonacci 61.8% for the short term, important intraday level & a previous support area which showed strength.

1.2142: This cycle's low, and the low of the last 4 years!

1.2000: psychological level.

Resistance:

1.2301: important intraday level.

1.2365: Fibonacci 38.2% for the drop from 1.2670.

1.2481: Fibonacci 61.8% for the drop from 1.2670.