The March Euro futures contract is trading lower overnight after testing Fibonacci resistance for the fifth consecutive day at 1.3204. On the downside, the 50 percent retracement level of the 1.3581 to 1.2627 at 1.3094 is the key support. Both of these levels have taken on the characteristics of a pivot price. In other words, a trade above 1.3204 is likely to attract the attention of bullish traders while a trade through 1.3094 will be noticed by the bears.
The uptrending Gann angle at 1.3187 today also seems to be attracting some trading activity. This angle held as support for almost two weeks but now the Euro is trading on its weakside. Until it pulls away from this angle, continue to look for it to act like a pivot price. This angle combined with the Fibonacci level form an important resistance cluster at 1.3204 to 1.3227 on Friday.
A downtrending Gann angle at 1.3141 is also in the picture today. A break under this level will be a sign that the market is turning bearish. If short traders begin to press the market under this level then the next downside target will be an uptrending Gann angle at 1.2907.
Based on the short-term range of 1.2627 to 1.3237, the 50 to 61.8 percent retracement zone at 1.2932 to 1.2860 is a potential downside target. This 50 percent level of this range combined with the previously mentioned uptrending Gann angle forms an important support cluster at 1.2927 to 1.2932 on Friday.
On the upside, a breakout above the most recent swing top at 1.3237 will reaffirm the uptrend on the daily chart and confirm the closing price reversal top on the monthly chart. This could trigger an acceleration to the upside with a downtrending Gann angle at 1.3351 the potential target.
Fundamentally, the Euro is down versus the U.S. Dollar because the European Union is struggling to reach an agreement with Greece. EU officials are trying to negotiate a deal with Greek bondholders on cutting the nation’s debt burden. The long process has triggered some concern among Euro traders who feel the Euro Zone economy is at risk if a deal isn’t passed soon.
Traders appear to be growing weary over the Greek deal. The process has been going on for weeks and the optimism that was built early seems to be waning. Traders seem poised to put risk back on, but are becoming more tentative with each test of the recent high. Adding to the indecision is Friday’s U.S. Non-Farm Payrolls report. Traders may not want to pick a side in the market going into this report. This may lead to a choppy two-sided trade today.
