Following its steep decline recently, the Euro-zone common currency, Euro, now seems to have stabilized and trying to build its base against other major currencies. Investors are now focused on the outcome of Federal Reserve's two-day monetary policy meeting, scheduled to be announced later on Wednesday.
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Meanwhile, here is a technical overview on important Euro pairs, namely - EURGBP, EURJPY, EURAUD and EURNZD.
After nearly dropping to 0.7000 mark, the pair has recovered sharply and is currently trading comfortably above 0.7200 mark at 0.7240 level, nearing 23.6% Fib. retracement level resistance of 0.8038-0.7013 downfall. Sustained trade above 23.6% Fib. retracement level is likely to extend the current pull-back rally initially towards 0.7330-40 intermediate horizontal resistance and eventually towards 0.7400-20 strong resistance, comprising of 38.2% Fib. retracement level and 50-day SMA. On the downside, 0.7170-60 area now seems to protect immediate downside. This is followed by a strong support near 0.7100 mark. Failure to hold its immediate support and a subsequent drop below 0.7100 could now negate the chances of any further recovery for the pair and the pair then could be vulnerable to drop even below 0.7000 mark towards testing 0.6910-0.6900 support area, marking Sept.-Oct. 2007 lows.
Although the pair seems to have found some support near 127.00 mark, it is yet to register any meaningful recovery. The pair is finding difficulty in decisively trading above 129.00 mark, representing 23.6% Fib. retracement level of its down-leg from Feb. highs to recent low touched on March 13. Even if the pair manages to clear this immediate hurdle, it is likely to confront another strong resistance around 130.00 psychological mark, specifically near 130.50-60 zone marking 38.2% Fib. retracement level. Near-term bias remains on the downside and hence, reversal from 129.00 mark and a subsequent drop back below 128.20-128.00 support is likely to confirm resumption of the pairs downward trajectory, possibly towards testing 125.00 mark support. Round figure marks, 127.00 and 126.00 mark might act as intermediate support levels. Only a decisive move and close above 130.00 mark resistance area might negate the bearish outlook and the pair could extend the pull-back immediately towards 132.00 mark strong resistance, comprising of 50% Fib. retracement level and 50-day SMA.
Following a drop to the lowest level since June 2013, the pair rebounded to test an important support break level now turned immediate strong resistance near 1.4000 region. Reversal from 1.4000 resistance level and a subsequent drop back below 1.3900 mark seems to drag the pair back towards testing 1.3800-1.3780 support area. Further, decisive break and close below 1.3800 mark support seems to open room for further downward momentum towards 1.3200 mark support with 1.3600 and 1.3400 mark acting as intermediate support levels. Alternatively, a decisive strength above 1.4000 mark is likely to trigger a short-covering rally immediately towards testing 1.4100-20 resistance level, which could further get extended beyond 1.4200 mark towards 1.4220-30 resistance area.
The pair remains within a well-established down-trend as depicted by a short-term descending trend-channel formation on 4-hourly chart. From current levels a drop below 1.4460-50 seems to accelerate the fall towards 1.4320-1.4300 support area. Further, a break below 1.4300 mark support is likely to force the pair towards testing the lower trend-line support of the descending channel, currently near 1.4150-40 zone. On the upside, 1.4560-70 zone seems to act as immediate resistance. But major upside resistance is pegged at the upper trend-line resistance of the channel, currently near 1.4600-20 area. A break above the upper trend-line resistance of the channel has the potential to lift the pair back towards testing 1.4800 mark resistance, which could further get extended towards an important psychological mark resistance near 1.5000 area.
Senior Market Analyst
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