EUR/USD’s one-day drop beneath key level at 1.3460 has reactivated the currency’s multi-month reversal pattern. This was also weighed down by a recent DeMark™ exhaustion signal.
Only a sustained daily close back above 1.3460 unlocks an extended recovery into our upside target zone at 1.3593 (200-day average).
Meanwhile, the bears need to close decisively below 1.3140, then 1.3000 (psychological support), in order to activate an important multimonth reversal pattern into 1.2630 (16 Jan swing low).
Inversely, the USD Index has rebounded sharply from key support at 78.66/10 (04 March low/TD Level) coupled with a DeMark™ buy signal.
Expect this level to act as one of the last points of defence for a relaunch of the greenback’s recovery which is still part of the bullish cycle into 80.73 (15th March high) and 81.78 (13th Jan swing/12 month high).