Europe’s shared currency coasted lower Wednesday, fading session peaks at 1.1366. As markets ready themselves for the European Central Bank, H4 price is seen languishing marginally south of 1.13, testing lows of 1.1257. US inflation data (CPI) announced modestly optimistic figures in February, though was largely ignored by market price.
With 1.13 labelled as potential resistance, January’s opening level at 1.1222 may welcome an approach on the H4 today, stalked closely by a 127.2% Fibonacci extension level at 1.1216 and the 1.12 handle. Indicator-based traders may also note the relative strength index (RSI) dipped its toes in waters beneath 50.00, indicating a bearish theme.
The 2019 yearly opening level from 1.1445 on the weekly timeframe – a noted port of resistance boasting incredibly strong history – entered view in recent trading, potentially setting the stage for an approach to a long-standing channel resistance-turned support, extended from the high 1.1569. The story on the daily timeframe had price chew through support at 1.1349 on Tuesday, with Wednesday engaging the level as resistance. Support is seen reasonably close by at 1.1199, a prior Quasimodo resistance, with a break likely pointing the finger to the 200-day SMA (orange – 1.1101).
In light of the recent crossing below support at 1.1349 on the daily scale and weekly action fading major resistance, bearish themes south of 1.13 could be an option today on the H4. Conservative traders, of course, may wait and see if a retest at 1.13 occurs before committing, strengthening the odds of a favourable trade, targeting 1.1222 as an initial base.
Disclaimer: The information contained in this material is intended for general advice only.