Resistance: 1,3550-55/ 1,3575/ 1,3620/ 1,3650-60/ 1,3700/ 1,3750/3790-00/ 1,3830
Support : 1,3460/ 1,3420/ 1,3380/ 1,3310-20/ 1,3270-80/ 1,3200/ 1,3150
Comment: The downward break of the base of 1,3800-30 on Monday, led to the exit of the short term consolidation that was formed after December's tops and euro reached much lower levels to 1,3300 area.
Yesterday's lows almost reached 61,8% retracement level from the rise of Oct-Nov base, while the area of 1,3280-3320 is now turned into a support.
Economic releases from euro zone are still mixed and the market is still concerned regarding ECB's reluctance to cut interest rates further as FED and BOE have done to boost the economy.
Yesterday's reaction is technically within the retracement ranges as it remains below the last base before the lows (hourly chart) and it as not breached 38,2% retracement level from 1,4000 tops.
First important resistance for today is found at 1,3660-80, followed by 1,3670-00, which is the upper part of the short term downward channel, that has been formed after the decline. An upward break of 1,3700 , would have as next target the base of 1,3820-50 or even higher.
If price remains below 1.3550-80 during the reactions, or it moves below 1.3420, it would be a sign of weakness and the short term downtrend may be continued. In such case, the area of 1,3300 is likely to be tested again, while a resumption to 1,3100 area would also be possible.
Finally, regarding the expectations of a return to December's tops, they are still valid as long as 1,3300 holds as support and an upward candle today, would change the outlook
We should mention that high volatility is back and sharp moves should be expected...
We will try buy orders with stops below 1,3400 and first target at 1,3670-00. We could add more positions after an upward break of 1,3560-70.
A move below 1,3400, would be considered as weakness and we may try sell orders with target at 1,3300.