The reflation trade has been on fire of late so today’s momentum stall comes hardly as a surprise. It gives the patient trader the opportunity to trim so longs and buy back on dips, improving one’s average price. Levels to watch on pullbacks in EUR/USD are the important levels broken on Friday. First is the broken trendline off the July 2008 highs. That somes in at 1.3515. The 200-day moving average is also eyed a bit lower at 1.3452.
The one fly in the ointment for EUR/USD is the bearish divergence in RSI on the latest rally. That measures should have put in a new high high as prices broke out on Friday but it failed to do so. Take that as a yellow warning light.
