April 21 (Reuters) - Today, we’re launching a new daily market commentary designed to help you quickly interpret the signals financial charts are sending—and what they may mean.
The euro is approaching decision time after its sharp rise against the dollar this month lifted it up near the 1.20 level, which will provide a crucial test of its ability to make further gains. The area around the 1.20 price level has generally become what technical analysts call “resistance” –a point where sellers tend to overwhelm buyers—after the euro failed to sustain rises above there this year. Another failure to break clearly above 1.20 could signal the return of the euro's longer-term downward trend. One caveat: the euro’s relatively modest pullbacks so far suggest it may still have room to rise against the dollar.
What the chart shows:
The euro's recent failure to hold above 1.20 suggests its long‑term downtrend may resume.
The significance of the 1.20 price level has been increased by its proximity to a moving average—which technical analysts watch for a smoother indication of a trading trend—in this case 200-month moving average, which is currently at 1.1912.
The euro's shallow retreats suggest it could still extend its powerful rise from 1.0125 in February 2025 to 1.2084 in January 2026.
(Reuters analysts’ take on the most interesting technical pattern of the day in forex markets.)
Peter Stoneham is a Reuters market analyst. The views expressed are his own
