The EURUSD had a bearish momentum yesterday but not as strong as I had expected. Moving in a volatile market, the pair attempted to push lower, slipped below 1.4595, bottomed at 1.4563 but bounced higher at 1.4678 before closed lower at 1.4612 after Trichet’s comment. As reported by Bloomberg, Trichet said that strong Dollar is “extremely important”. I really want to see how the market react today and days ahead to this statement. Will it trigger a bearish reversal? Well, I think although that comment doesn’t necessarily trigger a bearish reversal, but at least provide some support to the Dollar. Why buying the Euro if the President of ECB prefer strong Dollar? Now let’s check on technical side.
On h4 chart below we still have a valid bearish channel so further bearish correction warning is still a live and kicking although rejection to consistently move below 1.4595 should keep bullish scenario intact. A violation to the upside of the bearish channel could potentially put the bearish correction to it’s end but for me only a break above 1.4850 should be seen as bullish continuation towards 1.5000. Immediate support at 1.4563 (yesterday’s low). Break below that area should trigger further bearish momentum targeting 1.4440 and 1.4190.