EUR/USD 1,4775

Euro rally was capped yesterday at 1.4900, fresh 16-month highs, and the pair moved back from severely overbought stochastics, according to Carol Harmer, technical analyst at Charmer Charts, suggesting the possibility of further retracement over the coming sessions.

The pair, coming up from lows at the moment of writing, is expected to remain capped by 1.4885/00, which according to Harmer, offers a good selling opportunity: "Short term we are looking oversold, but this is to be expected given the move lower from 1.4900, so we may well see s small bounce early in the session, and this would give us a chance to re-sell this market. We look to sell at around 1.4885/1.4900 and we would only stop ourselves out if we broke the 1.4925 area."

On the mid term, the pair remains overbought, prone to a pull back, according to Harmer, who points out to 1.4585 and 1.4560 support levels: "However, we are overbought on the med term charts and therefore this is alerting us to the market taking a bit of a tumble. 1.4585 to 1.4560 offers us support and we look to cover shorts to here."

source: fxstreet.com