TECHNICAL ANALYSIS


FX


Chart 4: EUR/USD daily


2016, (the date of the result of the US Presidential election). In a similar fashion the pair has trended sideways since mid January.


We have to look at the monthly chart (see Chart 5) for any indication of future direction. Here we see a confluence of resistance from the 38.2% Fibonacci level of 1.2516 up to the short-term, 61.8% Fibonacci resistance at 1.2601. Within this band the blue 100 week moving average


makes an appearance adding weight to the resistance area, with the red 200 month moving average easing its way towards a meeting with the 100 month.


In February this heavy barrier overwhelmed the market and sent the pair tumbling by over 350 pips. Troughout March, we have made a very slow recovery, only really gathering pace in the last few days, as we reach 1.2462. For the dollar to


weaken further we are going to have to make a decisive move through the 1.2600 area.


A glance back at the daily chart (see Chart 4) shows good support from the 11-month trend line and short-term Fibonacci levels around 1.2235/1.2215. A break below 1.2200 therefore acts as a bearish confirmation, proving that the resistance we see on the monthly chart has triggered a resumption of the 10 year bear trend.


Chart 5: EUR/USD monthly FX TRADER MAGAZINE April - June 2018 19


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