The EURUSD failed to continue its bearish momentum this week after unable to make a clear break below strong/psychological support 1.4000 and closed higher at 1.4315 on Friday. On hourly chart below we can see price is moving strongly inside a bullish channel suggests strong bullish intraday outlook testing 38.2% Fibonacci retracement of 1.4939 – 1.3968 around 1.4340 (last week’s high). The bearish scenario since the strong bearish momentum from 1.4939 remains intact but a clear break above 1.4340 could trigger further bullish pullback testing the 50% Fibonacci retracement around 1.4450 which could be a threat to the medium/h4 chart bearish outlook. Above 1.4450, the next resistance to be tested is around 1.4560 which is the 61.8% retrcement and could cancel the bearish scenario retesting 1.4939. In my weekly summary last week I wrote that from the daily/weekly chart point of view the single currency is still in a bullish outlook so the current short term bullishness is not a big surprise. On the downside, immediate support is seen around 1.4200. A clear break below that area could trigger further bearish pressure testing the lower line of the bullish channel but the way I see it, we need a clear break below 1.4000 to continue the medium term bearish scenario and reactivate my bearish mode at least testing 1.3860 – 1.3750 support area.
Have a great weekend and see you guys next week.
©2011 FX Instructor Forex Blog - For Traders, By Traders. All Rights Reserved.