EURUSD 16th November – Technical Analysis Update
(EUR/USD Update, Forex-FX-4X.com, 16th November 2012)
Sentiment overview – Data released on Thursday confirmed the 17-nation euro-zone had unsurprisingly dropped back into a “double-dip” recessionin the third quarter of 2012. This comes as the euro-zone GDP (gross domestic product) contracted by 0.1% for the three-months through September. The EUR/USD still managed to continue its upside trajectory, from the recent two-month lows, and is displaying early, (but fragile) signs of near term bottoming although net gains were limited. The EUR also rallied against other key currencies. The EUR/JPY (euro vs Japanese yen) gained around 2.73% on Thursday and EUR/GBP (euro vs sterling) continued the recent upside movement, to print a two-week high of 0.8064.
Euro/Dollar Technical Analysis Overview
- The pin bar reversal setup we highlighted on the previous update (Wednesday 14th Nov) has held as an interim low, with early signs of bottoming out cautiously noted.
- The EUR/USD has subsequently seen a corrective move back to the previous support lows/200 SMA area, around the 1.2800 handle, an area which could prove troublesome for EURUSD bulls on any change in sentiment.
- Price action around 1.2800 is key in the near term as this area was supportive from August to November, and may now see resistance.
- Daily candles on Wednesday and Thursday this week printed consecutive gains for the EUR/USD, following a prior series of five daily lower closes. The weekly charts have seen three bearish candles in a row, a weekly close around current levels (or above 1.2711) essentially breaks the sequence.
- A sustained break above 1.2800 opens up a potential move towards the 38.2% Fibonacci retrace area, around 1.2840.
- A strong close above this 1.2800 point would also represent a close above the 200 day SMA, and hint towards additional EUR/USD upside on further short covering and speculative longs.
