EURUSD has broken a long-term downward sloping trend line resistance starting from 2008 highs and touching major highs until today. Usually when price breaks such important trend lines we usually see a back test.
Green line - long-term resistance trend line
Despite making a higher high this week, price close lower than last week. Price has broken an important trend line and it is key for bulls to stay above it. Trend remains bullish and we could next see a move towards 1.21. However a pull back towards 1.16 is justified as a back test of this break out. Key short-term support remains at 1.1750. Bulls need to defend this level if they want to see 1.21 soon. EURUSD has made a major low at 1.0640 at the beginning of the year. Holding above this low and breaking above 1.2550 will increase the chances for a multi year up trend. Price is now trading just above the 61.8% Fibonacci retracement of the decline from 1.2550 to 1.0640.
Bulls need to hold above this Fibonacci retracement as a reversal at current levels would keep the bearish multi year trend still in play.The material has been provided by InstaForex Company - www.instaforex.com