EURUSD – Daily Technical Outlook 2012.05.18
On Thursday, EUR slipped to touch a four-month low against USD, amidst worsening Euro-zone sovereign-debt crisis and weak US economic data adding fuel to investor’s cautious sentiment. We had been repeatedly saying that since EUR is in a strong down-trend against USD, it may continue to remain in oversold territory for an extended period of time. EUR has managed to decisively break below most of the short-term and medium-term technical support levels and continues to drift lower towards January lows of 1.2624. Should the pair continue with its strong down-trend, holding 1.2620 – 1.2630 support zone seems unlikely and the pair is likely to test 1.2525 levels. On the upside the pair may find resistance around 1.2680 - 1.2720 zone. Daily charts are looking over stretched on the downside and important technical indicators like RSI (below 30) and Stochastic Oscillator (below 20) shows highly oversold readings, we cannot rule out the possibility of a sharp pull-back. Important Technical Levels to watch Support 1 – 1.2608 Resistance 1 – 1.2688 Support 2 – 1.2585 Resistance 2 – 1.2722 Support 3 – 1.2522 Resistance 3 – 1.2762 Haresh Menghani Market Analyst Admiral Markets
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