EUR/USD: The pair reversed its entire Tuesday losses on Wednesday to close higher at $1.2430. Although upside attempts are being rebuffed by the bears, we see a nearer-term recovery risk shaping up as long as the pair can hold above its 2010 low at $1.2142. If this occurs, we will be looking for a move higher towards its 2009 low at $1.2456 with a break there allowing for more strength towards the $1.2520 level, its low of May 6.
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A reversal of roles should occur here and turn the pair back down again in line with its broader weakness. Alternatively, if the $1.2142 level breaks, further decline should follow towards the $1.2121 level, its .50. Fib Ret (0.8225-1.6037 rally, monthly chart) ahead of the 1.2000 level, its big psycho level. A breather is expected here to turn the pair higher.
All in all, EUR remains broadly biased to the downside in the medium term.
Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces
for his subscribers. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.