The EUR/USD kept falling last week and closed around 1.4180 affected by the negativity of the hidden bearish divergence of OsMA indicator which happened at the beginning of this month..

The pair is trading inside the neutral zone , add to that it looks like it's gonna form a triangle , MACD and OsMA show that a consolidation is on the horizon ....CCI shows a bearish momentum in the nearest time BUT RSI has a different story to say ?!!!!

According to RSI we still in upward trend , the bearish correction that started from 1.4939 on the 4th of May 2011 is about to be end and strong bullish move is on the horizon towards 1.4440/1.4750 (unless we witness a daily close below the 30 line , then it will indicate that the uptrend that started from 1.2874 (10 Jan 2011) has ended and new downtrend has started targeting 1.4750/1.4350 and may be 1.2850...otherwise the pair is heading toward 1.5000 level !!!

Don't forget we are trading below EMA 50 and above EMA 200 , add to that multiple support levels are around the price now , so a high volatile move is on the horizon this week , so I recommend to watch the pair's reaction / move for 2 days or at least for today , if the support level 1.3968 is taken out , a bullish correction towards 1.4125 - 14075 is on the horizon before heading towards 1.4750 , the other option ; the pair may find strong support around 1.4000 level and pullback strongly towards 1.4440/1.4750 level...

Finally RSI(14) on 1 hour and 4 hour , showed that the assumed target for the bearish move that happened last week was achieved with maximum profit , so all doors are open up/down !!!

Monthly support and resistance levels: (June 2011)

Resistance: (1.4750) main, where correction is possible, break would test (1.5075), the next levels are (1.5400) and (1.5720)…For buyers the bullish zone is above 1.4750

Support :( 1.4100) main, where correction is possible, break would test (1.3775), the next levels are (1.3450) and (1.3130)…For sellers, the bearish zone is below (1.4100)...

The neutral zone is between (1.4100 - 1.4750) where it is recommended to evaluate activities on daily and weekly.

The pivot level for this month is (1.4426), since we have a weekly close below this level , but the pair failed to break below 1.4100 , it may test it this week ?!!!

Monthly : use weekly and daily close ;

Above 1.4750 very bullish trend..

Between 1.4426 - 1.4750 light bullish trend.

Between 1.4426 - 1.4100 light bearish trend.

Below 1.4100 very bearish trend...

 Since last week close is above 1.4100, we still have light bearish trend, a daily close at least below this level is indeed to test the area 1.3775...

Weekly support and resistance levels: (27June - 01 July 2011)

Resistance: (1.4285) main, where correction is possible, break would test (1.4390), the next levels are (1.4495) and (1.4600)…For buyers the bullish zone is above 1.4285

Support :( 1.4075) main, where correction is possible, break would test (1.3970), the next levels are (1.3865) and (1.3760)…For sellers, the bearish zone is below (1.4075)...

The neutral zone is between (1.4075 - 1.4285) where it is recommended to evaluate activities on 60 min and 240 min.

The pivot level for this week is (1.4180)…

Since the weekly pivot is below the monthly, a strong bearish move on the horizon, a daily close below this level will support the downtrend....BUT we are at the last week of June, the pivot level for this week doesn’t break below the monthly support 1.4100 so strong pullback also on the horizon toward 1.4426 - 1.4750 so we need to watch the pair day by day to find its upcoming direction!!!

Weekly :use 1 hour and (4 hour ..recommended).

Above 1.4285 very bullish trend..

Between 1.4180 - 1.4285 light bullish trend.

Between 1.4075 - 1.4180 light bearish trend..

Below 1.4075 very bearish trend..

 Trend Direction is Downward, the trend will remain valid as long as stability is below 1.4360, a daily close above this level may weak the downtrend and lead for bullish correction towards 1.4700 levels…

Recommendations: Upon the chart and the explanation posted above , my recommendation is observing trading today for more confirmations and follow the daily updates..

Best Regards

Haitham653

Monday 27 June 2011 05:37 AM