The euro has been grinding higher over the last few days, paring some of the losses made since it reached its 2013 highs on 25 October.
The pair ran into resistance today though around 1.35, a previous level of support and resistance and a key psychological level. This is also where the ascending trend line that it broke below 7 November intersects the 38.2 fib level. This makes the level a major level of resistance for the pair.
A look at the 1-hour chart suggests we’re going to see another test of this level. There has been a very clear pattern in the pair during the recent correction, with it pulling back each time towards the 50 and 61.8 fib levels, before continuing its push higher beyond its previous high.
We saw the same thing again this morning, along with a cross in oversold territory on the stochastic, which suggests another test of 1.35 could be on the horizon.
About Craig Erlam
Craig Erlam is Market Analyst at Alpari (UK). He joined Alpari (UK) at the beginning of 2012 after four years in the financial services industry, including working at Goldman Sachs. Craig writes market commentary that regularly appears on websites including The Financial Times, Reuters, BBC, The Telegraph and FOX Business. He also provides insight and analysis for clients which he posts daily on Twitter and the Alpari (UK) website. You can also find Craig on YouTube where he gives short market updates, including charting analysis.