Richard Perry
Independent Analyst
It is interesting that we are seeing consolidation on the euro right around the resistance of the 3 month downtrend and also around the 21 day moving average. This is also coming with the RSI up and close to 50. This adds to my feeling that the euro is still sitting at a key crossroads for the near/medium term outlook. The intraday hourly chart shows the continuation of the recovery uptrend but now we are seeing the old resistance around $1.0900 acting as the support. There is a concern though that this support could actually be a neckline of a small head and shoulders top on the hourly chart. A consistent decline back below $1.0900 would therefore imply an immediate downside target of $1.0770 which would be a test of the recovery uptrend again. It is also a concern that the hourly momentum indicators are deteriorating once more and suggest that the steam is being taken out of the rally. A push back above yesterday’s reaction high at $1.1030 would reignite the bull run.
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