The EUR-USD has been consolidating this week, and in Wednesday's US session, there is a very sharp corrective rally. This moves the pair above 78.6% fibo retracement at 1.3490, and cracked the 1.35 psych resistance mark. This sharp move also pushes above the 200-D SMA, the 1.34 resistance Cluster above 1.35.
The strength of today's rally suggests a bottom is in to the November Bear cycle.
But looking at the 4-H chart, there is 1 more Key resistance barrier to crack to confirm. The pair is still trading within a Declining Channel, with resistance near 1.3550 which is also the level of some common highs from the consolidation zone during November 16 to 23 time frame. Next, there is near-term resistance at the 1.36 Handle, which is also near 38.2% fibo retracement.
The upside opens up further if a back up fails to break back below 1.3430. There is the 1.3730, 50% fibo retracement and 1.3850, 61.8% fibo retracement levels to look forward to for the extension of the current corrective rally.
All of that said, the short-term counter-trend Bearish target from the Channel resistance at 1.3550, should be limited to 1.3430 for now.
A clear break below 1.3430 opens up the possibility of a Bearish continuation if the Channel resistance holds.
Paul A. Ebeling, Jnr
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.