The Consolidating Euro
Benedetto DiCostanzo | Apr 26, 2015 03:30AM ET
The euro has been on vacation in the month of April. After a dramatic move to new lows in the middle of March to 1.0473 the bears haven’t been able to press their advantage. April has seen the euro trade within March’s range. With a week to go in the month the euro is seeing rallies rejected and declines rejected. The candle’s body is small with shadows above and below the body. To me, this is showing a tired market. With large short positions in the market already established, and an attempt to make a new low thwarted in the middle of the month, some position squaring seems to be taking place.
The Daily chart shows the euro making its way higher since it was unable to take out the March 13, 2015 lows on April 13 with a low of 1.0529. For the euro to continue moving higher it has to surpass some hurdles. Today, the 50 day moving average has held back the rally, with today’s high just short of this average. There is also trend line resistance above the average. The 50 Day Moving average is at 1.0914 and the trend lines come in at 1.0960 and 1.1015. A trade lower from here next week could send the euro back to test the lower trend line at 1.0554. I look to sell a rally to the trend line resistance with a stop appropriate for your account. My 1st target would be the 21 day moving average at 1.0782, then the lower trend line. I see the euro trading within the trend lines until there is a better handle on Greece.
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