The FX Specialist view – The recovery in EUR/USD from a Jun low has turned out impressive, with a second bull leg now well underway. This has started to reach certain interesting resistance levels which the market could find tough to overcome.
- WEEKLY CHART
Currently a 3-wave, corrective structure is unfolding in the recovery.
On this chart note the current 76.4% 1.4373 level as potential resistance, and note how a former 76.4% level was effective in late 2009. - DAILY CHART:
Recovery through the 1.3333 06-Aug high has now breached the bull channel top projection to test our next technical level at 1.4040, an equality target that extends the Jun/Aug upleg off 24-Aug low.
Temporary resistance would not surprise here, but the s/term chart structure remains very positive.
Possible stronger resistance is offered by the higher 1.4373 76.4% retracement level. Currently we view the recovery as temporary, within the context of a longer term bear trend.
First notable support comes from the 1.3333 06-Aug high but, at this stage, it wouldn’t be until the 1.3000 area was broken that bull momentum could finally be said to have dried up.
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