I was going to not post tonight, but given the sharp downward movement in the EUR vs. the USD I thought I should post at least a few comments.

Right now the pair has fallen back and is within the former range that we broke out of yesterday – it is below 1.5000.  Some sort of pullback was likely, in fact a large percentage of breakouts pull back to their breakout point.  On the hourly chart we are above the last swing low, still indicating short term strength.  And just as reduced volume had to be taken into account on the breakout, the lower volume has be considered on this slide.

Friday is a shortened session for the US markets, and can again mean sharp movements due to reduced liquidity.

Support is the lows of the recent swing at 1.4935.  The long tail here represents aggressive buying off this level.  Support beyond is at 1.4920 and 1.4890.  A move below this would indicate likely movement to the low of the range at 1.4800 with support along the way at 1.4870 and 1.4830.

Renewed upward pressure is not really present until a move back above 1.5030.  Targets/resistance beyond is around 1.5060, 1.5090, 1.5110-1.5120 followed by Wednesday’s high at 1.5145.

Cory Mitchell, CMT
Chief Market Strategist
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