Dollar Rally Continue?
We went right to the point on Tuesday where resistance would kick in, 1.4770-1.4780, and it went right to 1.4780 but could not get above. This has set up a bearish formation on the short term charts. Unless that resistance area is taken out, and ultimately 1.4900, the eur/usd is in correction.
That of course does not mean there can’t be a move higher…there can, and it may still fall short of 1.4900. Movement above 1.4780 is likely to target 1.4820, 1.4840 (both of these are minor resistance points) and if it continues then 1.4860. Movement above this point will run at the former swing highs at 1.4890-1.4900.
Short-term trend is down and first minor support comes in at 1.4720 with a drop below targeting 1.4700. No real confirmation of a further decline comes until the rate moves below 1.4660. This would target 1.4625 followed by 1.4600-1.4580. 1.4560 and 1.4530 provide support beyond if the pair continues to fall.
Trade Balance and Unemployment Claims due of the US at 13:30 GMT.
Forex trading analysis written by Cory Mitchell, CMT for Forexpros.