Thursday and Friday of this week saw the Euro crash down to test the 1.3500 area and bounce off of that to move up, slightly. This momentum to the downside could potentially carry the euro to break the 1.3500 support area and even the most recent low of 1.3434. If those critical support levels break we could see a free fall in the Eur/Usd until the pair reaches the 1.3200 level.
In the past month the downward slide for the euro has stalled at the 1.3434 area and has been range trading for over a month. Don’t expect the pair to drop without a fight as current support has proved to be strong.
Lets look at the 4hr chart.
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You can see from the chart above that the pair has slowed down the descent at the 1.3500 level. This is easier to see by zooming in and looking at 1hr candles. On the one hour chart you can see the bounce and then the price started to turn back down again.
My thoughts on the Hr chart show me that we are entering a consolidation period after the downward move. Watch the price to see if it breaks above 1.3550 or below 1.3500 that will be an indication of which way the price may be moving.
In addition to technical analysis to determine direction Forex Breaking News can be important to determine the direction and can cause many breakouts. Winners Edge Trading uses a News service called Trade The News, click on the link for a free trial.
I also recommend Forex Crunch a free site that gives a general overview of all upcoming news releases for the upcoming week. One other resource you can check out is a blog that follows the Eur/Usd call the Geek Knows.
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