Prices have found not only a continuation of the U.S. Dollar strength today but continues to do so despite equities buying. The breakout through the triangle pattern on the 30 minute chart show’s that the 81.00 was not a level that seller’s were willing to step in at. The key to any breakout is whether or not buyers will support prices when prices pull back. If the intraday move higher is to be a trend, there will be a correction and 81.00 will and should be tested since it is a major psychological level.
The EUR/USD has been trending lower on U.S. Dollar strength and that means that the continued upside on the dollar is key to trades playing euro weakness. There were two key levels that have been tested this week. The most important was not the breakdown through 1.3700 but rather the rejection at 1.3800 when prices attempted to rally through. This shows where the stronghold for seller’s is intraday. The other near term ceiling is at the 1.3650 level. Heading lower, today’s low was at 1.3340. Notice that if you keep your eyes open for these psychological levels, you will be within usually five to ten pips (usually closer) to key support and resistance.
Since the 15, 30, and 60 minute EUR/USD charts are in a downtrend, look for swing trades of 34period EMA low resistance. Currently those levels are the 1.3500 on the 15 minute, 1.3530 on the 30 minute, and 1.3555 on the 60 minute chart.
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