FXstreet.com (Barcelona) - After having hit a five-week high at 1.3770 last week, the Euro closed the week at 1.3290, to drop to levels shortly above 1.3155 on early European session on Monday. Mohammed Isah, technical analyst at FXTechstrategy, observes the pair bottoming above 1.3000.
EUR/USD correction triggered a strong bearish move on breaking 1.3330 key level, according to Mohammed Isah, technical analyst at FXTechstrategy: EUR's corrective pullbacks following its recent sharp rally witnessed a price collapse below its key support at the 1.3330 level, its Jan 27'09 high/range top the past week. This price development leaves its short term recovery off the 1.2456 level, its Mar 04'09 high on hold and has opened up downside threats towards the 1.3093 level, its Feb 09'09 high and subsequently the 1.2992/1.3000 area, its Feb 23'09 high/psycho level.
Isah points out to the importance of holding above 1.3000 for a return to prices above 1.3300: Maintaining above the former or even the latter is now required to create some hope of a return back above the 1.3330 level which is now seen as a resistance and expected to hold on retests. If above the 1.3330 level is printed, we could see a run at its Mar 19'09 high at 1.3738 with a clean break and hold above there highlighting the 1.3799 level, its Jan 08'09 high ahead of a bigger resistance zone at the 1.3857/88.
All in all, Isah affirms that 12995/1.3000 support would contain current decline: Weekly momentum remains positive in structure suggesting further strength. On the whole, while its short term recovery higher remains shaky below the 1.3330 level, we expect the 1.3093 or even the 1.2992/1.3000 area to contain current price declines and push the pair back up again.