More bad news from Europe and euro is getting hit by all this situation. When we look at bigger picture, we can clearly see two Fibonacci retracements, which are strong resistance for eurusd. First one – from peak in May to the low in the beginning of October – is 61.8% and lately 38.2%.
When we take a closer look, four hour time frame, from high on October 27th to low on November 1st there is a retracement at 38.2% (1.3850) which was too strong to break above so far. Few hours ago, there was a break below 200 simple moving average and low from November 1st.
4hour chart, eurusd:
Sure enough, Fibonacci extensions will be a valuable tool to use right now.
I think that strong move down to 1.2000 is possible in long term perspective – this is a 161.8% extensions of move from first picture in the post. But first there is a support at 1.3100 (low from October 4th).
In the current situation, selling at correction is a good idea.