Very weak euro

forex/Uncategorized

November 09, 2011 at 3:47 pm by simon

More bad news from Europe and euro is getting hit by all this situation. When we look at bigger picture, we can clearly see two Fibonacci retracements, which are strong resistance for eurusd. First one – from peak in May to the low in the beginning of October – is 61.8% and lately 38.2%.

Weekly eurusd:

Weekly fibonacci eurusd chart

Weekly fibonacci eurusd chart

When we take a closer look, four hour time frame, from high on October 27th to low on November 1st there is a retracement at 38.2% (1.3850) which was too strong to break above so far. Few hours ago, there was a break below 200 simple moving average and low from November 1st.

4hour chart, eurusd:

4hour Fibonacci eurusd chart

4hour Fibonacci eurusd chart

Sure enough, Fibonacci extensions will be a valuable tool to use right now.
I think that strong move down to 1.2000 is possible in long term perspective – this is a 161.8% extensions of move from first picture in the post. But first there is a support at 1.3100 (low from October 4th).
In the current situation, selling at correction is a good idea.

Weekly eurusd:

Broader view - Fibonacci eurusd weekly chart

Broader view - Fibonacci eurusd weekly chart

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