The EURUSD was corrected lower this week. The bearish movement was triggered by a shooting star candle stick formation which appeared on daily chart on Monday after the failure to make a clear break above 1.4000 key resistance area but found a good support at 1.3740/60 which is the 23.6% Fibonacci retracement of 1.2873 – 1.4035 as I already mentioned in my daily outlook on Friday. As long as price moves below 1.4035, this bearish correction scenario should remain intact and for the upcoming week, 1.3740/60 – 1.4035 will be a key support/resistance to be watched closely. I will write more details about daily/intraday analysis next week but now let’s see from a broader outlook from a weekly chart point of view in order to make a projection about how high Euro can go if the bullish scenario continues. As you can see on my weekly chart below, price has been moving in a bearish channel since the fall from 1.6038 on July 2008 suggests a bearish weekly outlook. If, the shooting star bearish scenario (daily chart) fail next week and we have a clear break above 1.4035, the upside scenario seems limited as a strong resistance could be found around the upper line of the bearish channel which probably located around 1.4281 region and may create big downside move from there, probably testing 1.3000 even lower. On the other hand, a violation to the bearish channel would continue the bullish outlook at least testing 1.5143 (November 2009 high).
Have a great weekend and see you guys next week.
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