On Tuesday the 19th of February, trading on the EURUSD pair started from 1.1310. It dropped to 1.1275 by midday before undergoing a sharp upwards reversal to reach our target of 1.1341. It then pressed on to hit 1.1355 before retreating to close the day below the newly broken resistance. The level to which the pair corrected (1.1341) is, first of all, the intraday high from the 13th of February, and secondly, it coincides with the 38.2% Fibonacci level of the decline from 1.1514 to 1.1233.
Tuesday’s newswires were fairly quiet. The only thing worth noting is the German business sentiment index from ZEW, which shed 13.4 points, although this was slightly better than the expected decline of 14.0 points.
The pair has decisively broken out of the downwards channel formed at the end of January, and has formed a new upwards channel. The next significant target within this channel is at 1.1375, which marks the 50% Fibonacci level of the latest decline.