Nick Nasad
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EUR/USD - Euro Finds Support at Key Level, Temporary Bounce or Start of Rally?

The Euro looks to have gotten its groove back in today's session advancing against most of its major rivals (excluding the Aussie).

Let's look at the prized EUR/USD in the 4-hour timeframe.

  • Looking at it after the fact, we had a very nice bounce off a key level of support at 1.3620.
  • This had been a level of resistance back in late November, was broken, and then acted as support before the start of a nice upswing that topped out near 1.38.
  • There were enough orders clustered around that level, that it found support. The key question now is, is this a temporary bounce?
  • The pair had been in a sideways range between 1.38 and 1.37/1.3720 and that range's support may now turn to resistance if the recent downmove extends.
  • However a move back into the aforementioned range likely means that despite the FOMC tapring, the "dovish" nature of the tapering can still mean a stronger EUR ahead.
  • Much will depend on whether the Euro-zone data supports such a move and I think the 1.38 will pose a significant challenge.

I don't necessarily have a clear bias, probably more bullish than bearish here, say 60/40, but the technical levels are pretty clear. What do you guys think? Let me know in the comments.