EUR/USD Climb In Question As US Dollar Drop Finds Fibonacci Support

US DOLLAR BOUNCES FROM FIBONACCI SUPPORT AT 96.47

The four-day drop in the US Dollar has finally found some element of support around the 96.47 Fibonacci level that’s been in-play in various ways over the past seven months. This is the same level that had helped to elicit resistance in the Greenback in August of last year. This same level also became an area of support in December, resistance in January and here in March, support again. This is the 23.6% retracement of the 2011-2017 major move in DXY.

This presents an interesting backdrop for US Dollar bulls as prices have been working within the confines of an ascending triangle formation, taking the higher-lows that have been showing since September along with the horizontal resistance that’s built around 97.71 since November. This formation will often be approached with the aim of bullish breakouts, targeting fresh highs; and given the recent action of the ECB announcing a fresh round of stimulus, the fundamental backdrop appears as though it could be supportive of such a scenario.

US DOLLAR WEEKLY PRICE CHART

us dollar usd weekly price chart

 

On a short-term basis, the big question is whether this support holds into another bullish run in the US Dollar, as the 97.71 level looms ominously above. That price has elicited three rather strong cases of resistance, in November, December and again last Friday. On the way up, buyers would have to encounter potential turbulence or resistance around the 97.00 level, which had failed to hold this week’s lows, followed by the 97.20-97.30 area that’s elicited a few different resistance inflections in mid-February and again on Tuesday of this week.

Below current price action, the 96.30 level remains of interest for support, followed by the zone around the 96.00 area, after which the trend-line connecting the September, 2018 and January 2019 lows comes into play.

US DOLLAR EIGHT-HOUR PRICE CHART

US Dollar usd eight hour price chart

 

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