Richard Perry
Independent Analyst
The euro has been broadly in a state of consolidation for the past few days as traders try to figure out the next move. This seems to be coming to an important crossroads technically as the next move would either confirm the continuation of the downtrend or begin to signal the potential for a more considered euro rally. That junction is at $1.2600 which has capped the upside moves in the past few weeks and remains the neckline resistance of the head and shoulders continuation. The recent drift higher in the euro has enabled the Stochastics to unwind back towards the level they reached in mid-October before they rolled over, whilst the RSI has plateaued just under 50. The next move could therefore be key for the medium term outlook. The intraday hourly chart shows pressure continues on the $1.2577/$1.2600 resistance band. A break above $1.2600 opens $1.2632 but then there is little real resistance until $1.2770 which marks a key reaction high on the daily chart. The intraday chart would have you believe the euro bulls are gaining confidence for a break. Support at $1.2440.
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