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Technical Analysis EUR/USD

As suggested on 21st February the EUR/USD reached the 1.3308 target and is now advancing further as markets appear to have found confidence in the Euro following the Greek deal. The optimism that no disasters are imminent, further supported by the upcoming ECB LTRO auction, is propping up the single currency. EUR/USD shot up during Friday’s session ending the recent multi-session consolidation between the 1.3115-1.3322 area and opening the door for the next upside movement towards the 1.3500-1.3600 area. The pair is holding firmly above the 89 SMA, which hasn’t been the case since August 2011 and it should also be noted that the price has broken above the 38.2% Fibonacci level, from August’s high at 1.4518 and January’s low at 1.2647. Considering that the US Dollar Index is still trading in a downward channel since mid- January, we could expect EUR/USD to rise further. The pair saw some profit taking this morning and it is currently trading at 1.3428. Long positions could target the 50% Fibonacci retracement at 1.3572, which is seen as key resistance. In the alternative scenario, a drop under 1.3350 could call for 1.3000.

Dafni Serdari
Market Analyst
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