If we check the weekly chart posted above , we are under negative pressure , but we are also so close from the support of the uptrend channel , RSI on the weekly chart confined the bullish breakout at 1.4940 , it suggested a test to the area 1.4020 , strong support , EMA 50 currently 1.3906 , and maybe further towards 1.4750....BUT
Keep in mind that we need to watch the weekly close this week , if we have a close above 1.4020 ,the pair may test the sloping resistance line around 1.4300 next week !
If this week close is above 1.4020 , next week we a close above the high of this week , this would a sign for trend continuation , and the pair may test 1.4940 very soon !! BUT
from another point , if we have a close below 1.4020 , especially below EMA50 1.3906 , it will open too many doors for further down-move , if we have a break below 1.3750 , it will take the pair very down towards 1.3350/00 and may be lower below 1.3000 level ...
The noisy thing is to have a weekly close between 1.3906/1.4020 , 1.4020 will push lower while 1.3906 will push higher !!! so either way move may happen !!!
Let's shift down to the daily chart to take a closer picture about what would happen the next few days?!
According the daily chart , we are in uptrend - long term , down - trend short term , it very clear we are under strong pressure but the pair failed yesterday to close below 1.3968 where the buyers bottomed low of 23 May 2011 , now the pair trapped between 1.3968 / 1.4102 , a daily close above 1.4102 is supposed to too many doors to move higher , but the most important thing that we need to watch on daily chart is stochastic (5.3.3) which it's about to form a bullish divergence , once the slow stoch moves out of the over-sold area , it would give us a supper bullish signal on daily ?!!
Briefly , in short term we are bearish , but as long as 1.3750 holds any bearish move is supposed to be limited , once this level is taken out , then the long term and the short will match and the pair will be heading towards 1.3350/00 levels and maybe lower the next coming weeks ?!!!
What will happen today ?!!
I'd like to check the 30 min chart below ?!!
Weekly support and resistance levels: (11 Jul - 15 Jul 2011)
Resistance: (1.4335) main, where correction is possible, break would test (1.4460), the next levels are (1.4580) and (1.4705)…For buyers the bullish zone is above 1.4335
Support :( 1.4090) main, where correction is possible, break would test (1.3965), the next levels are (1.3840) and (1.3715)…For sellers, the bearish zone is below (1.4090)...
The neutral zone is between (1.4090 - 1.4335) where it is recommended to evaluate activities on 60 min and 240 min.
The pivot level for this week is (1.4215)…
Weekly :use 1 hour and (4 hour ..recommended).
Above 1.4335 very bullish trend..
Between 1.4215 - 1.4335 light bullish trend.
Between 1.4090 - 1.4215 light bearish trend..
Below 1.4090 very bearish trend..
Trend Direction is Downward , the trend will remain valid as long as stability is below1.4320, a daily close above this level may lead for a bullish move towards 1.4550/1.4720 levels…
Recommendations : Upon the chart and the explanation posted above , my recommendation is observing trading today and following the daily updates for more confirmations !
Wednesday 13 July 2011 07:10 AM