EUR/USD (daily chart as of May 5, 2014) rebounded once again from the
daily EMA 50 (bold purple moving average on chart) after the non-farm
payrolls report last Friday. The daily EMA 50 has been serving as
support since April 21 (green arrow).
Price is now testing the short-term downtrend line (line 3). Another spike (the last gray shadow) may be in the making, if it is unable to clear line 3 and fails to hold 1.3820 again. Note that there were several spikes that overshot 1.3820 in the past four months (gray shadows).
The pair is trading in a large rising wedge between two trend lines (line 1 and line 2), which is a potential bearish pattern after an uptrend move. Within the large rising wedge, the pair is also trading in a small triangle range between two short-term trend lines (line 3 and line 4).
The euro zone’s low inflation will remain a threat to its economic growth, amid the geopolitical risk from the crisis in Ukraine. ECB President Draghi mentioned last month that his “biggest fear” is a protracted stagnation, which could force the ECB to take action to avoid deflation, including negative interest rates or QE.
Support levels below:
1st support: daily EMA 50
2nd support: daily EMA 100
3rd support: line 4, line 2 or daily EMA 200
Resistance levels above:
1st resistance: line 3
2nd resistance: 1.3905 (April 11 high)
3rd resistance: 1.3966 (March 13 high)
Price is now testing the short-term downtrend line (line 3). Another spike (the last gray shadow) may be in the making, if it is unable to clear line 3 and fails to hold 1.3820 again. Note that there were several spikes that overshot 1.3820 in the past four months (gray shadows).
The pair is trading in a large rising wedge between two trend lines (line 1 and line 2), which is a potential bearish pattern after an uptrend move. Within the large rising wedge, the pair is also trading in a small triangle range between two short-term trend lines (line 3 and line 4).
The euro zone’s low inflation will remain a threat to its economic growth, amid the geopolitical risk from the crisis in Ukraine. ECB President Draghi mentioned last month that his “biggest fear” is a protracted stagnation, which could force the ECB to take action to avoid deflation, including negative interest rates or QE.
Support levels below:
1st support: daily EMA 50
2nd support: daily EMA 100
3rd support: line 4, line 2 or daily EMA 200
Resistance levels above:
1st resistance: line 3
2nd resistance: 1.3905 (April 11 high)
3rd resistance: 1.3966 (March 13 high)
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