Following is a selection of comments from analysts on important technical developments in the foreign exchange market:
The euro traded below the 1.2478 support level by 22 pips only to recover strongly and post a bullish key day reversal. A rally of similar magnitude to that seen from the 1.1640 low would be a logical expectation. That was a 685-pip move which, if replicated, would suggest a move toward 1.3141, very close to our existing short-term target of 1.3125 and the 76.4 percent pullback level of 1.3160/90.
A push lower would then target the confluence of the 38.2% of 108.96-117.88 and 78.6 percent of 113.43-117.88 at 114.39/48. Resistance is at former intraday supporting this morning at 116.54.
Bullish divergence with RSI on the hourly along with RSI in oversold territory argues for a bounce in the near term. The July 18 and 19 lows at 1.2444/47 are immediate resistance.