Blue line- resistance
EURUSD reached as high as 1.0480 two days ago. Price has bounced strongly like a released pressured spring after a multi month decline and pressure on EUR. Price has reached the very important level of 1.05 which was a critical support. At 1.05 we had seen a major horizontal support level which now acts as a resistance. EURUSD tested this resistance and as we explained in previous posts, a pull back is justified as price has reached overbought levels in the near term. Price is now trading around 1.0323. Price has still not reached the 38% Fibonacci retracement of the decline from 1.2290. We believe that after a short-term pause to this upside bounce, we should expect more upside towards 1.0590. At the end of the week we usually see profit taking by traders. After such a strong upward movement, it is natural to see short-term bulls take profits at the end of the trading week.
