Sat, 23th of May, 2009

By Setyo Wibowo (analyst@fxinstructor.com)

EURUSD Outlook

So far, up to the third week of May, EURUSD has been showing significant bullish momentum, and there could be further bullish potential throughout the rest of the month, and further down the road. One of the common questions during bullish market condition is what are the next potential upside targets? Targets are projected in many ways and I like to use Fibonacci study and historical levels. As you can see in my h4 chart below, I have 3 potential targets if the bullish scenario continue. The first and the nearest is 1.4173 (50% Fibo retracement of 1.6037 – 1.2327). The second is 1.4351 and the third target is 1.4716. The last two targets are historical levels, December 2008 highs. Is that mean that EURUSD will reach these targets? Of course not. I find that one of the biggest mistake make by traders (including me in my early months trading forex) is the mindset that we think we know the future and treat projections/predictions just like some kind of prophecy that must or will happen and the market must agree with us. That is a big mistake. The truth is, no one know the future and when we finally find that our projection is wrong and the market go against us, simply admit it and make adjustments with the latest market situation. Inability to admit our own mistakes only make things worse. So,  will these targets be reached in upcoming days/weeks? I hope so but I am more than ready to change my mind and adjust with newest market condition.  Have a great weekend and see you guys next week :)