EUR/USD Seeking to Form a Price Bottom; 1.3550 Will be Key

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EUR/USD Seeking to Form a Price Bottom; 1.3550 Will be Key

After initially falling Last week, EUR/USD started to consolidate and found support at 1.3512, and resistance at 1.3575. This week, it respected the 1.3512 support again, and traders are pushing EUR/USD above the 1.3575 resistance, seeking to form a price bottom.
EUR/USD 1H chart 6/16
eurusd 1h chart 6/16

The prevailing trend has been bearish since EUR/USD failed to push above 1.40 in May. Therefore, we should not be so fast to call this a price bottom until further confirmation. One such confirmation could develop from a subsequent pullback from the current breakout. 1.3550, maybe with elbow space to 1.3540 , could be key – it is the central pivot area of the consolidation, where we saw support and resistance.

If price falls, but holds above 1.3550, the price bottom would be a stronger base for a bullish attempt. A break below 1.3550 however, would put the focus back to 1.3512, 1.35, and the 1.3476 low on the year.

Looking at the bullish chart, we can see that a bullish breakout would expose the 1.36 handle and the 1.3676 resistance. A break below the 1.3512, 1.35, and 1.3476 low would open up the 1.3295-1.33 support area from Nov. 2013.
EUR/USD Daily Chart 6/16
eurusd daily chart 6/16

To contact the reporter of this story, email Fan Yang at fan@forexminute.com
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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.