EURUSD – Daily Technical Outlook 2012.05.21
On Friday, EUR managed to bounce back sharply from days’ low of 1.2642, very close to its January lows of 1.2624 and finally settled at the high point of the day at 1.2774.
EUR managed to defend January 2012 lows and bounce-back from its short-term support zone near 1.2620 – 1.2630 levels.
We had indicated the possibility of a sharp pull-back since daily charts were over stretched on the downside and important technical indicators like RSI and Stochastic Oscillator were showing highly oversold readings.
On Monday, EUR continued with its up-move against USD after the Group of Eight major economies affirmed that they want Greece to remain in the Euro-zone. EUR currently is quoting at 1.2789 against USD.
This pull-back is likely to be extended till 1.2840 – 1.2850 levels, coinciding with 23.6% Fibonacci Retracement level of EUR’s move from February highs of 1.3485 to Friday’s low of 1.2642.
Should the pair decisively trade above 1.2840 – 1.2850 resistance zone, the pull back is likely to be extended till 1.2940 – 1.2960, where the pair is likely to face stiff resistance.
On the downside, EUR is likely to hold 1.2680 – 1.2720 support zone in the short-term and intraday may find support around 1.2750 levels.
