Yesterday was a big reversal day for Euro pairs. EUR/USD dived about 200 pips after the Italian PM Renzi failed to persuade the Italian public to vote the constitutional changes, which again to me are necessary for Italy to function properly. Yet, Italians voted against them and the Euro broke some decent support and resistance levels.

As we said in our market update yesterday, the 1.0520 resistance level was pierced, but I don´t consider it valid unless 1.0500 gets broken too.  So, on the bottom side, these are the major support levels, but closer to the current price is 1.07 which has been providing resistance in the last two weeks. That will be the first support level now if the sellers decide to return, followed by 1.0650 where you can find the 50 and 100 SMAs on the H4 EUR/USD chart.

Will this be the reversing point or shall we wait a little longer? 

The top side is more interesting though, since the price is headed up and we´ll have to pick the resistance levels is we are to open a long term sell EUR/USD signal.  The 1.08 level is the first decent resistance and with the 100 smooth MA just there I think that this will be a make or break level for EUR/USD buyers.

Above there comes the 1.0850 level which has been the bottom edge of the trading range since February. That´s another solid resistance level and it can also be considered as a continuation of the 1.08 level. 1.09 will also be a bump on the road, but the ultimate resistance level is obviously 1.10. I´m inclined to open a sell signal up there, but not if we get there too soon.

A quick move there today or tomorrow would mean that EUR/USD sellers are folding their cards fast, which might push this forex pair even higher as forex traders close their sell positions one after another. But, if the move up is steady and it takes a couple of weeks, then I think that would be a good opportunity to go in. Many of things might change by then, but we´ll be here to reconsider the situation.