Euro Push Likely to Continue?

Overall there was not much change last week in the EUR/USD.  Heading into this week, the 1.3100-1.3200 resistance still remains overhead, yet the trend also remains up.  With the pullback last week having little follow through it is likely that a test of this resistance area will be seen.

A likely target is the high of this area at 1.3200 –  based on the small triangle breakout which can be seen on the chart.  Average weekly movement is just over 400 pips, putting this price within reach over the next several days.  1.3200 is also likely to act as resistance, with a move through likely to extent towards 1.3400.

With the pair currently trading at 1.2935, the uptrend is not in close proximity to being in danger.  1.2500 is a support level to watch as this is a swing low, and also the trendline has an impact at this price (crossing through).  It also happens to be the 50% retracement level for the swing from the lows at 1.1875 to the intra-day high last Tuesday.  A break below 1.2500 shows a further correction downward is likely.  Support comes in at the next retracement level just above 1.2300.  A move beyond this shows that the upward move is finished and likely new lows will be seen.

At this point the trend is up, on the short-term, but as mentioned last week the long term downtrend has been broken.  Short term traders can watch the highs and lows put in last week.  A move above 1.3030 indicates a test of the resistance area mentioned above.   On the flip side, a drop below 1.2725 indicates a test of support mentioned.

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Cheers,

Cory Mitchell, CMT

EUR/USD Daily, FreeStockCharts