EUR/USD (daily chart) has tentatively paused its bearish correction of the past week at strong support around the key 1.3000 support region. This occurs after price reached a double top last week and turned down, respecting important resistance around the 1.3300 area. In the process of dipping down to 1.3000 support, price has also approached a key bullish support trend line extending back to the July 2012 1.2041 low, as well as the 50-day moving average. With this strong confluence of support around 1.3000, price can be considered to be at a critical juncture. In the event of a bounce off this 1.3000 support, the 1.3300 region could once again serve as potential upside resistance on a recovery of the current pullback/retracement. If the 1.3000 support confluence is broken to the downside, which could break or disrupt the bullish trend extending back to July 2012, price could move towards further potential support around the 1.2800 price region.
James Chen, CMT
Chief Technical Strategist
FX Solutions
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