EUR / USD – Returning to its Other Friend at 1.34

January 18, 2013

As expected, within the last week the Euro has run into a brick wall at 1.34 which was a previous resistance level earlier last year.  In doing so however, this pushed the Euro up into territory not seen in nine months. The Euro finished last week very strongly surging up through the resistance level at 1.33 that had established itself over the last month or so and this level has resurfaced in the last few days providing much needed support.  During ths time, the Euro did track down through 1.33 a little however it was quickly bought up at prices above 1.3260.   In the daily chart, the Euro formed a doji pattern representing indecision and this can often be a reversal signal.  Within the last day, the Euro has surged higher off the back of the support at 1.33 and pushed back within reach of the other key level at 1.34.

Back in the middle of December, the Euro established a neat trading range trading between the significant level at 1.3150 and 1.33, after having broken through the resistance level around 1.3150. It eventually broke down through the support level at 1.3150 earlier this month moving sharply back to the round price level at 1.30. This level stood up and provided strong support for the Euro which resulted in the strong push higher to end last week.

Both 1.33 and 1.34 remain current key levels and the latter is presently providing resistance again as it has done previously.

(Daily chart / 4 hourly chart below)


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