EUR/USD Corrects Lower Today But Bounces Off Support

The EUR/USD is correcting today (Monday) after the sharp move higher last week.

The pair initially moved up on the Tokyo opening reaching a new high of 1.3665 but fell back as France and Italy announced lower than expected Industrial Production.

The pair moved below the 100 bar moving average on the 5 minute chart for the first time since breaking higher on Friday (broke higher at the 1.3394 level).  The move below the intraday moving average occurred at the 1.3639 level indicating the shorter term momentum was beginning to fade somewhat.  The pair them moved down and tested the old trendline off the longer term daily chart which was broken on Friday (see chart point below).  This trendline connects the highs from July 2008 and December 2008.

The bounce off this trendline is a positive development as it shows buying interest on dips.  This level will be watched as the key support level today. A break below it should lead to further corrective pressure.

On the topside today, watch resistance at the 1.3605 level  where the 100 bar MA on the 5 minute intraday chart is currently located (and moving down).  Above that level is 1.3627 which is the closing level from Friday.

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