Technically, this week’s rally in the March Euro is impressive, but it hasn’t changed the trend on the daily chart. This will only occur when the January 3 top at 1.3085 is violated. In fact, without a potentially bullish closing price reversal bottom to work with, all this currency has done up to this point is retrace slightly more than 50 percent of the break from 1.3085 to 1.2627.
With the main trend down on the daily chart and as the single currency enters a key retracement zone, traders should be looking for opportunities to re-enter on the short side. Besides the 50 percent retracement level, traders should pay particular attention to the 61.8% retracement level at 1.2911.
In addition, traders should also be watching for a reaction if the downtrending Gann angle at 1.2921 is tested. This price combined with the Fibonacci retracement level at 1.2911 could form a tight resistance cluster today.
