EURUSD - Euro Very Likely To Test 1.2750 Versus US Dollar

Technical Bias: Bearish

Key Takeaways

• Euro failed to gain momentum against the US dollar during this past week and likely to continue trading lower this week.

• 1.2750 is the next level of interest where there is a chance of the Euro buyers taking a stand.

• EURUSD support seen at 1.2800 and resistance ahead at 1.2920.

The Euro has an important support area around the 1.2800-1.2750, which can be tested in the near term and must hold for a larger correction.

Technical Analysis

There was an ascending channel formed on the 4 hour timeframe for the EURUSD chart, which was broken during this past week. The most important thing is that the broken channel support trend line acted as a resistance later. The pair is currently attempting one more correction from the 1.2825 low, which can fail around the 38.2% Fibonacci retracement level of the last drop from the 1.2996 high to 1.2825 low. The 4H RSI is bouncing the oversold level, so there is a chance of a correction in the short term. However, one final spike towards the 1.2750 level cannot be denied, which represents a major fib level of the complete 2012 rally. The first major support is around the 1.2800 level, followed by the 1.2750 area. Any further losses might be very painful for the Euro buyers, as it might take the pair towards the 1.2600 area.

If the pair corrects from the current levels, then initial resistance can be seen around the 38.2% fib level at 1.2890. However, the most important short-term resistance is around the 50% fib level at 1.2911, which also represent the previous swing level.

Euro Zone Consumer Confidence

Later today, the Euro zone consumer confidence will be released by the European commission. It is likely to fall from the -10 to -10.5. So, let us see whether there is a surprise in the coming session or not.

Overall, the pair remains under bearish pressure and rallies might present selling opportunity.