The EURUSD attempted to push lower this week, bottomed at 1.3104 on Monday but whipsawed to the upside and closed higher at 1.3252 on Friday, keep the intraday bullish bias remain strong. As you can see on my daily chart below price is moving inside a descending triangle formation, suggests a consolidation phase but still in a context of a major bearish outlook. We have seen many false breaks during this consolidation phase, making intraday trading activities a little bit harder. The current short term bullish phase, which is a result of another failure to break below 1.3000, is now challenging the upper line of the triangle, EMA 200 and 1.3300 – 1.3350 key resistance area. From a longer term outlook (although short term bullish bias remains strong), selling around those resistances is not a bad idea. In fact, it is the best place with the best risk reward ratio in current context, targeting 1.3000 or lower with stop loss above 1.3350. On the upside, a clear break and daily/weekly close above the descending triangle and EMA 200 could be an early signal of a major bullish reversal scenario testing 1.3500 1.3600 or higher. Immediate support is seen around 1.3170 1.3150. A clear break and daily close back below that area could trigger further bearish pressure retesting 1.3000 strong support area.
Have a great weekend and see you guys next week.
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Technical analysis for precious metals with major support and resistance levels and recommendations for 18-08-2009