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On Tuesday, EURO extended gains against USD to its highest levels since May 15 after Moody's Investors Service warned that US runs the risk of credit rating downgrade and amid growing speculation of more stimulus measures from the US Federal Reserve to support the US economy.
On Wednesday, USD remained lower versus EURO before Germany’s Federal Constitutional Court issues ruling on the country’s participation in ESM, Euro-zone's permanent bailout fund, today.
The pair managed to hold support near the 50% Fibonacci Retracement Level and decisively moved above the 200-day SMA and the upward momentum continued to strengthen. The pair is currently quoting at 1.2873 near the 1.2880 – 1.2900 resistance zone.
Now on the downside, 1.2810 level - the 200-day SMA which stands at 1.2808, may act as important support in the near-term for the currency pair.
Moreover, 1.2750 – 1.2760 zone representing the 50% retracement level may continue to act as immediate support for the currency pair, below the 200-day SMA.
Should the pair decisively break below 1.2750 support zone, the pair seems to test 1.2620 – 1.2640 important level in the short-term that now seems to act as a very strong support on the downside.
On the upside, the pair is likely to face immediate resistance near 1.2880 - 1.2900 zone.
Any up-move for the currency pair above 1.2900 resistance zone seems capped at 1.2930 – 1.2935 level – coinciding with the 61.8% retracement level.
Technical indicators – 14-day RSI above 70 and Stochastic Oscillator above 80, suggests a considerable chance of a corrective pull-back for the currency pair in the short-term at least till 1.2700 levels.
Intraday Important Technical Levels
Support 1 – 1.2839 Resistance 1 – 1.2902
Support 2 – 1.2809 Resistance 2 – 1.2933
Support 3 – 1.2755 Resistance 3 – 1.2974
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