The EURUSD continued its bullish momentum last week topped at 1.3168 and closed at 1.3127...
Before we start looking to the next week, I’d like first to take a quick look to most important support and resistance levels on daily chart!!
I’m gonna start from top to down!!!
1-Low of 01 Nov 2011 at 1.3608
2 Low of 09 Nov 2011 at 1.3520
3-Low of 03 Apr 2012 at 1.3212 (Monthly Resistance).
4-Low of 02 Mar 2012 at 1.3186 (Weekly Resistance).
5-Low of 09 Mar 2012 at 1.3096
6-High of 23 Jan 2012 at 1.3052
7 High of 03 Aug 2012 at 1.2392
These are previous bearish/bullish breakouts on daily , weekly and monthly.
As you see from the chart posted below, the pair trades now near the long term sloping resistance line around 1.3200 areas….
Add to that we have some strong resistance levels around this area at 1.3186 & 1.3212, I think breaking above this area is not easy at all, so I believe this rise is only a correction as long as we have a daily closing below 1.3212 levels, topping around this level is suggested !!!
But in return, a daily closing above 1.3212 followed by breaking above the sloping resistance line would be a trend reversal signal on long term and the pair should target 1.3520 easily…
On the downside , as you see we have big gap between 1.2392 & 1.3052 , so a daily closing below 1.3052 I think might be a real threat to the upward correction , and It might completely end this bullish scenario !!!
Here are some minor support levels on 4 hour chart:
1.2785, 1.2630, 1.2530
Conclusion: since we have lot of important levels around 1.3000 , at 1.3052, 1.3096 & 1.3212, I don’t think the pair is gonna leave this area very soon , It might trade here for 2 or 3 weeks before the next move, any reversal pattern followed by a daily closing below 1.3052 ; I think It might end this bullish correction !!!
So far, buying the pair at support is recommended …I think 1.3200 should be tested before any move below 1.30000 , because we don't have any sign of topping yet !!!
Trend Direction: Upward
Trading range for this week: 1.3000:1.3250
Recommendations for this week:
1-Buying the pair around 1.3050 targeting 1.3200, stop loss at 1.2980 or stop out with a daily closing below 1.3052.
2-Selling the pair –cautiously- with a daily closing below 1.3052 targeting 1.2800, stop loss 1.3120 or stop out with a daily closing above 1.3502…..
Note: for daily closing use GMT