The last few days I have talked about a reversal. Not a "catch a falling knife" trade, but I do expect a bounce at some point and with major lows taken out and a rally back above, it appears prudent to be aware of a potential reversal and not get married to the short.
Yesterday I mentioned 1.2450 as a level that if surpassed could trigger some bullish action. I does not mean a straight up shot after that, but it would indicate that the Euro is seeing some more aggressive buyers coming in. On Wednesday we approached that level on a significantly strong day for the EUR which produced a bullish engulfing pattern.
The pair currently trades at 1.2392. Failure to get above 1.2450 is bearish as this is the former swing high. Support in this case comes in between 1.2250-1.2225 and 1.2150.
1.2450 is a resistance a level but a move beyond could trigger further buying into 1.2515. Beyond this resistance comes in at 1.2580-1.2600.
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