EUR/USD 4H chart 10:10AM EDT 4/10/2013
1.31, 38.2% retracement: EUR/USD continues to reverse against the 1.3710-1.2744 decline that formed throughout March. So far in April, the EUR/USD has made a 38.2% retracement, cracking the 1.31 handle as seen in the 4H chart. EUR/USD is still in its first swing that broke above a double bottom, though the structure is more like a diagonal triangle now.
Levels: The current 38.2% retracement level is a resistance, and we are seeing a reaction there already. The first support could be the 1.3050, previous resistance pivot. However, in a throwback, a key possible support would be around the 1.2966 area where the diagonal triangle began. To the upside, a break above the current high opens up a resistance/support pivot around 1.3160-1.3165.
The 4H RSI tagged 70 a few times, showing bullish momentum. If there is a throwback, the RSI should stay above 40 in the bullish scenario. Failure to hold above 1.2965 would be a sign the market wants to retest the double bottom. A break below the 1.2880-1.29 area would show no respect for the double bottom and would be a sign the market is sideways to bearish, instead of the currently sideways to bullish assessment.
More upside aggressive targets for the rest of this week and the next:
50% retracement = 1.3227
61.8% retracement = 1.334