Long-Term Support Levels Near For The EUR/USD
Shain Vernier • 1 min read
The USD has opened the trading week strong across the majors. Gains against the British pound, Euro, and Japanese yen highlight what is turning out to be a great U.S. session for Greenback bulls.
Economic events have been kind to the USD throughout the day. Stronger than expected U.S. Existing Home Sales data and rising bond yields have breathed life into the Greenback. As a result, the EUR/USD is positioned to challenge a collection of long-term support levels.
When it comes to trading horizontal levels, converging indicators are an extremely positive thing. The weekly chart for the EUR/USD gives us four distinct support levels falling within a 55 pip range.
As a general rule, the longer the time frame the more valid the technical level. The weekly chart has several support levels to be aware of as this week unfolds:
- Support(1): 20 Day EMA, 1.2195 (not pictured)
- Support(2): 38% Retracement Current Wave, 1.2172
- Support(3): Bollinger MP, 1.2161
- Support(4): Weekly SMA, 1.2142
Overview: The key fundamental release occurring during the next four sessions is the ECB’s Interest Rate and Deposit Rate decisions on Thursday. As this event approaches, I expect market conditions facing the Euro to tighten up quite a bit.
The area between 1.2200 and 1.2125 is set up to be a make-or-break level for the intermediate term. I will be looking for signs of bearish exhaustion near the weekly support levels using shorter timeframes. If one occurs before the ECB, then a position long may be in the offing as we roll toward April’s end.
For now, a long from 1.2176 with an initial stop at 1.2139 produces 37 pips on a 1:1 risk vs reward management plan.