The crisis on Greece and Italy has weighed heavier versus the US unemployment data last Friday that led the current directional trend lower for the Euro & the British Pound. Frantic investors shifting to the US Dollar for safe Haven and flight to quality have pushed the US dollar Index higher and have penetrated its initial trend line resistance above the 75.08/50 basis point level range. Increase volatility have made other traders reluctant for the past week and month's trading to create further positions on both sides of the direction. As the past week's move for the EURUSD has tapped the 1.4566 level highs where a lot of bullish speculators have been holding their positions leading to buy in any price lower for the Euro. Unfortunately, the bearish signals were there except no one have anticipated such bearishness to make a follow through until it continued to move lower on the first trading day of this week.
On a technical perspective, it has been the USDX compared with its inverse counter part of the EURUSD was more identifiable where one could see the three piercing formations made from the past few weeks. And this can only be seen on the weekly charts of the USDX vs the EURUSD & the similar configuration with the EURGBP cross rates. Apparently, the 1st initial support from a rising Fibonacci fan formation for the EURUSD is at the currently low of 1.3910/30 and thereafter is the 1.3750-1.3880 range trading; where we would find some profit-taking may take place from earlier shorts from the 1.4180 previous support price levels, now the 2nd resistance from the 1.4080 price levels. An average trading range between 120-150 pips up and down price swings can be attributed to the increase volatility currently present in the market place.
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