Ohhhh, just dipped below the 1.4820 level in Tuesday’s session but still managed to hold above 1.4800, which was its fifth time testing it this month.  Currently we are off that level and trading at 1.4884.

1.4900 is the 50% retracement level for this last swing lower (I am using 1.4990 and not 1.5014 as the high).  1.4900 and also 1.4920 if needed are resistance on further moves higher.  More significant resistance comes in at 1.4950-1.4970.  If we crawl above that and get to 1.4980 it is likely we will take another run at 1.5000.  If needed resistance above is 1.5015-1.5020 followed by 1.5045 and 1.5060.

Light support comes in at 1.4860 with a move below 1.4850 heading to test 1.4820 followed by 1.4800.  Now there is a head and shoulders and pattern on the 1 hour chart (it is an ugly pattern but it looks its purdiest on this time frame).  Even without that 1.4800 is a significant level, so the POSSIBLE head and shoulders just adds to that.  A break below 1.4800, if it is legit, will find support at 1.4770, 1.4740-1.4730 then 1.4700.  If the break is not legit and just a stop run, it will likely tucker out by 1.4780-1.4770 and then reverse.  I say that only we because we all know there are a pile of stops sitting down there.

Cory Mitchell, CMT
Chief Market Strategist
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