EURUSD – Euro/dollar uptrend intact, waiting for a buy signal
The EURUSD entered into a consolidation phase last week after hitting a high of 1.3403 last Monday. The uptrend in this market remains intact, and this week we are waiting for a pullback to support to buy into this uptrend on weakness. If the market rotates down into the 1.3250 – 1.3150 support / value zone we will keep our eyes peeled for a 4 hour or daily chart price action buy signal to trade back in-line with the uptrend.
The EUR/USD pair fell during the session on Friday, but remains above the 1.33 support level in order to stay relatively bullish. The pair looks like it’s trying to continue climbing higher, and as a result we think that a bounce is more than likely going to come. We are one willing to start buying here, for short-term gains but we think that the 1.34 level will be resistance for the next couple of sessions. Once we get above the 1.34 level, we think that the 1.35 level will be targeted and a move above that would be a massively bullish sign as it would be breaking the neckline of an inverted head and shoulders. The inverted head and shoulders measures for a move up to the 1.50 level, which of course would be a massive move indeed.
Because of this, we sincerely hope that the pair can break out and look to hold onto any trade that shows inclinations of that. Taken a couple small losses in the process will be nothing compared of the reward that could be had if this trade triggers.
We see the 1.3250 level is extremely supportive below as well, and as a result is going to be almost impossible to short this pair in the meantime. In fact, we think that the pair has plenty of support all the way down to the 1.30 level, and as a result we think that any pullbacks will offer buying opportunities in the near-term.
The European Central Bank has suggested recently that they have no intentions on cutting rates and as a result we should see the Euro continue to be bid up in a fairly healthy manner. This pair should continue to chop along and no fluid movement will probably be seen until we get above the 1.35 level, however there seem to be plenty of headlines that affect this pair every few days, so a sudden move could possibly happen. Again, as for selling we have no interest in doing so until we get below the 1.30 level, and at that point time we would have to think about it a little harder.
EUR/USD Forecast January 21, 2013, Technical Analysis
