As we anticipated some sessions ago, http://timelymarkets.blogspot.com/2010/03/euro-against-dollar-goal-is-achieved.html there was a couple of technical reasons to think that it would be very difficult for the European currency to go over the level of 1.38 dollars per euro. This zone concentrated a huge bearish interests. First all, because of the powerful resistance that prices have formed around this area. Secondly, because the main technical element, the falling channel, was too influential in the middle-term scenario. Consequently it coudn´t allow the euro to have a sustainable recovery. Finally, the classic indicator Momentum was completely overbought.
Afterwards, the support of 1.35 break-down has confirmed the euro falling scenario. There is not relevant supports from a short-term perspective until the level of 1.30, which coincides with the channel bottom. This area could again draw new bullish interest, taken into account that technical indicators could be oversold by then.
The technical recommendation is to open long positions on the level of 1.30-1.3050. Stop loss in 1.2860.
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