As a result of last Friday’s sell-off, most of the European currencies gapped down during this week’s foreign exchange market opening. One of the most affected was the EURUSD pair (click here to see the previous post about it). Aside from worrying on the Greece financial crisis, the possible sovereign default by Hungary even worsened its market condition and especially the currency value. Fortunately, the Euro and most pairs were able to fill the gaps as they rallied today.
Chart-wise, the EURUSD is moving in a 7-month descending channel (yellow lines) in the daily chart. At the same time, there could be a bounce back up to the 121.00-122.00 resistance line (blue line) as the pair currently hit the descending channel’s support line (indicated by the red line). If the value fails to lift itself to resistance area, the Euro could further slip and drop to its 4-year support at 1.1630 (brown line).