Like Frodo and Sam at the hellish gates of Mordor, EUR/USD is hovering eerily over its major 50% retracement of 1.2135-2 (appx. with variation due to bids). Key levels like this don’t come along too often, and if you’re not aware of it already, please let this post be a heads up that you do.
Yesterday's German ban on naked short selling delivered a brutalizing punch to the pair, which is now down approximately -15% from the beginning of the year.
Because of the massive range, there’s going to be a slight variation of pips, but Reuters is publishing it at 1.2135 (0.8225 all time low – 1.6038 all time high). Regardless of the outcome, the level is still there and its not going away and will be likely used in the short or long term provided any pass on or through it. Look for stacking brick patterns above or below the level on smaller timeframes .
Key buyers are noted preventing further decline below the level around the current low of 1.2142, but given the race of news events coming out lately further slide is being headlined on many fronts from a macro basis.
Even if they seem to be ignored the first time, levels like this are not forgotten about in either long or short scenarios.
Thoughts or outlook? Please feel free to comment below.