EUR/USD

Fundamental factors-

The German Ifo business confidence index fell for the first time for five months in March, data showed on Tuesday, as the Crimea crisis hurts the sentiment in Europe's biggest economy. The Ifo economic institute's closely watched business climate index fell to 110.7 points this month from 111.3 points in February. The Euro fell against most of its 16 major counterparts as below-forecast European business data fueled speculation that the region’s economy may struggle further to recover. On the other hand, the Fed indicated it could raise the US short-term rates earlier than expected, which is highly negative for the euro. Is this the starting point for trend reversal in EUR/USD?

Technical factors-

Forecast

EUR/USD made a long-term top in 2008 at the level of 1.6038. Since then it has corrected in a huge down trend channel which seems to be a double zigzag correction. Currently, it seems to have completed 'x' inside the larger Y of DZZ near 1.40, which is also weekly Channel Resistance, or if the pair trades above the level 1.3966, it may extend its rally up to 1.41 levels. With RSI Negative Divergence signaling reversal break, the area below 1.36 would be an indication of the short-term trend reversal towards 1.32.

Intraday-

In the H4 chart, the pair is trading between the levels at 1.3749-1.3853. RSI is giving a positive indication, we expect the up move still to continue with sl at 1.3749. In Asia's trading session, the pair is trading at 1.3827 facing immediate resistance levels at 1.3830 and 1.3853. On the down side, the support exists at 1.3814 and 1.3780. If the pair breaks the 1.3749 level, next strong support level exists at 1.3714.

In the daily chart, RSI favors sell side. So any pull back leads to generate sell positions, and huge short covering will take place if the pair breaks the 1.3966 level on up side, until it go shorts on a positional basis at higher levels.

S1 1.3815 R1 1.3876

S2 1.3749 R2 1.3934