Technical Check – Important EUR Pairs and Euro Index

EURUSD

The pair failed to build on its sharp up-move from 1.1000 level to above 1.1700 mark and subsequently reversed back to test an important support confluence near 1.1150 level. The 1.1150 support level comprises of 61.8% Fib. retracement level of 1.0808 to 1.1713 up-swing, a short-term ascending trend-line support and a descending trend-line resistance break point. The pair is currently trading near the ascending trend-line support near 1.1200 mark. A decisive break below 1.1200 mark now seems to immediately drag the pair back towards testing 61.8% fib. retracement level support near 1.1150. The fall could further get extended towards testing 1.1120-10 support area, comprising of 100-day SMA and the descending trend-line break-out point. Alternatively, should the pair continue holding above 1.1200 mark and manages to move back above 50% Fib. retracement level resistance near 1.1250-60 zone, it seems more likely to clear 1.1300 intermediate resistance and aim towards testing 38.2% Fib. retracement level resistance near 1.1360-70 area. The up-move could further get extended towards the very important psychological mark resistance near 1.1500 mark, also coinciding with 23.6% Fib. retracement level.

EURGBP

Following a break-through a descending trend-line resistance, the pair’s recovery extended to test an important resistance near 0.7350 level. The pair is currently hovering around 0.7350 resistance area, comprising of 200-day SMA and 23.6% Fib. retracement level of Aug. 2013 to July 2015 big downfall. The pair has managed to move above 200-day SMA for the first time since Oct. 2013 and should it continue holding above 0.7350-70 resistance area it seems more likely to extend the recovery trend towards 0.7600-20 resistance area, marked by 38.2% Fib. retracement level. Intermediate resistance levels area pegged near 0.7440-50 zone and 0.7560-70 region. However, should the pair starts reversing from this immediate resistance and subsequently drop below 0.7310-0.7300 support area, it is likely to drop immediately towards testing the descending trend-line resistance break-point now turned support near 0.7200 level. Further, a decisive weakness back below 0.7200 mark might negate any near-term bullish expectations, thus paving way for resumption of the prior weakening trend towards testing a very important support near 0.7050-40 area.

EURJPY

The pair once again failed to sustain its strength above 200-day SMA and a reversal from a short-term descending trend-line resistance dragged the pair below a an ascending trend-line support. Extending its weakness, the pair subsequent dropped below 200-day SMA and has now weakened below 38.2% Fib. retracement level of its up-move from April low to high tested in June. From current levels, sustained weakness below 135.00 mark is likely to be followed by an extended fall towards testing a very important support at 133.60-50 area, nearing 50% Fib. retracement level, with 134.40 horizontal area providing some intermediate support. Meanwhile, bounce-back from 135.00 mark and a subsequent move above 38.2% Fib. retracement level resistance near 135.40 level now seems to confront resistance at 200-day SMA, currently near 136.20-30 region. A sustained trade above 200-day SMA has the potential to lift the pair back towards testing the ascending trend-line support break point now turned resistance near 137.50-60 zone, also coinciding with 23.6% Fib. retracement level. The 137.50 region now seems to act as a very important resistance on the upside.

I.EURX

Although the index managed to move above 200-day SMA for the first time since May 2014, it seems to have lost momentum and started reversing from 38.2% Fib. retracement level of March 2013 to March 2015 bearish fall. The 38.2% Fib. retracement level also coincides with a short-term ascending trend-line resistance, which along with another ascending trend-line seems to constitute towards formation of a bearish Rising Wedge chart-pattern. The lower ascending trend-line support lies near 98.30 level, also coinciding with 23.6% Fib. retracement level. Failure to hold 98.30 important support, thus confirming the possible bearish Rising Wedge chart pattern, seems to accelerated the fall towards its next important support near 97.00 mark. However, should it manage to hold 98.30 support confluence and manages to move above 99.30-35 immediate horizontal resistance, the index is likely to make a fresh attempt to surpass 100.00 psychological mark resistance and aim towards retesting the very important resistance confluence near 101.00 mark. Only a decisive strength above 101.00 strong resistance might negate any near-term bearish outlook for the index.

Follow me on twitter @Fx_Haresh for latest market updates