Hello traders from all parts of the world! My forex pick for the day is the EURUSD pair or “fiber” as many would call it. As you can see, the Euro has been strong against the greenback since it broke out from the cup and handle formation last September (kindly check here). Afterwards, a bullish symmetrical triangle formed, broke out to follow through the upward momentum and reach the 1.4282 9-month high last November 4 (kindly see it here). However, the Euro now sank against the US Dollar dropping by a thousand pips since the beginning of this Month. Key factors highly involved in demoting the pair’s value include theconcern on Ireland’s debt crisis then followed up by the North Korea artillery strike to South Korea yesterday which could raise potential war. In times like these, investors become wary and pull out their investments from the financial markets especially stocks, which in turn, causes markets including the US stock market to decline. Where do they move their money after? To the US Dollar as most of them find it a safe haven.
On the daily chart, the uptrend is still intact for the EURUSD as long as the 6-month support holds. If the pair breaks down from the trend, it could drop all the way down until it finds some support at the 1.3000 psychological level. If the 1.3000 price mark further fails to hold on to the Euro’s descent, the next catcher could be 1.2600. On the other hand, if the Euro reverses the downtrend and bounces back up, the significant resistance it could encounter is 1.3800. If 1.3800 gets cleared out, the next resistance could be the 1.4282 9-month high. Above all, as long as the uptrend remains intact, I’d stay bullish on this currency pair.