EUR slided slowly during the past two days, and yesterday finally dropped below the important fibo 23.6 level which is placed @ 1.2910. However downside continued to 1.2835 and there some bull were waiting, so the price reversed back to 1.2880 where is currently trading at the moment of writing. The last is not a surprise because 1.2830 is another strong and important support. @ 1.2830 passes the diagonal support line from end of february, end of march, and end of april 2012 lower tops. So 1.2800-1.2830 will be hard to break lower but if it happens EUR will drop below 1.27 to 1.2660 at least. I doubt this will happen for the next 2 days which are the last of this month. In fact use drops to buy EUR because correction is very close to the end and soon the bulls will take control. You know bulls have eye covers which allow them to see only forward and not sideways. They cannot see that S&P came out with a forecast in which nothing good for EU for this and next year is said. They cannot see also the Spain's central bank warning about country's bailout. They cannot see the everyday strikes in Spain and Greece, and that the next with the very serious problems in EU will be Italy.
Mr.Draghi has said "many people believe in us (means ECB) and we will not betray their confidence", so bulls are waiting for the beginnig of the ECB bond buying program, and any rumors in this direction may fire the EUR rocket far above 1.30 up to 1.3320 and then to 1.3510. So be carefull an place pending buy stops along the way up. But for this one condition must be complete - we need a weekly close above 1.3030.
In fact if such upside happens it won't last for more than a month, so use the following upside above 1.30 to sell EUR as one of the Societe Generale strategy makers advised recently. Let's take some technical look over the charts. On Weekly we have some more space for the upside to attack 1.3170 once again, on fail we shall go back to 1.22 maybe, from where a correction higher will develop. The time frame for this is 3-4 weeks. On Daily i expect EUR to move sideways between 1.2830 and 1.2950 within next 4-5 days. All shall look ahead to the ECB rate decision, if you remember many analysts have been expected a rate cut last time. We need a clear break of 1.2970 and daily close above 1.3030 to confirm the current correction is over. If ECB won't make a rate cut i do not expect EUR to fall below 1.2800 within the next 3 weeks.
H4 chart shows that today we may test 1.2910-20 fibo level but we have a resistance @ 1.2940-55 which will hold the further upside, downside is limited to 1.2820-30.
GOLD as forecasted faced a huge resistance area between 1788-1800 which won't be passed easy. As expected a correction move followed which is currently not over, despite the price returned back above 1752. We need a weekly close above 1770 to resume upside which is a very very difficult condition right now. But GOLD still preserves the upside mood.
LONG GOLD above 1736 SL 1730, TP 1755
SHORT EUR below 1.2950 SL 1.2990, TP 1.2880 - 1.2830
LONG EUR above 1.2830 SL1.2800 TP 1.2880 - 1.2910