The Euro as a currency has soared to the highest level against the US dollars in the last three years. It had a break in the past yet another layer of chart resistance thus, hitting the move upward will soon continues. The prices have pulled back after showing a bearish candlestick pattern as expected but the move quickly turned to go in line with a hawkish ECB meeting minutes.
From these point of view, a daily close which is above 50% Fibonacci expansion at 1.2430 opened the door for a challenge of the 61.8% level at 1.2637. a move back below the 38.2% Fib at 1.2223 alternatively paves the way for a retests of resistance-turned-support at 1.2092, known as the September 8 high.
At the moment, standing aside may seem prudent but a longer term positioning reveals that the Euro entering into a critical resistance zone, arguing against the currency upward. The absence of a clear-cut bearish reversal signal on the other hand means that entering the short is premature, especially considering the recent bullish momentum.
At the time of writing this, here are the talking points in the EUR USD resistance and support levels.
EUR/USD Technical Strategy: the EUR/USD technical strategy at the time of writing is taken as flat.
The Euro aims above 1.24 after breaking yet another chart resistance level.
Conflicting cues argue against taking long or short position at this time.
A good look at the charts reveals that the Euro is gaining more and more momentum against the USD and will continue to soar even in the nearest future.
FACTORS THAT AFFECT THE EUR USD RESISTANCE AND SUPPORT LEVELS
The factors that affects the EUR USD resistance and support levels are listed below.
- EXCHANGE RATES
The higher the exchange rates, the higher the EUR USD resistance and support levels. This is because the market is controlled by the exchange rates. Once the exchange rate is affected, the resistance and support levels are also affected.
- The Economy
The EUR/USD currency pair rates are controlled by the Economy controlling the two currencies. If the economy is bad, the exchange rate is affected and vice versa. The better the economy, the better the resistance and support levels.
- THE FORCES OF DEMAND AND SUPPLY
The higher the demand, the higher the supply and vice versa. The level of demand for the currency pair will ultimately determine the level of support and resistance.
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