The EURUSD still trapped in range market of 1.4950 – 1.4850 yesterday. I think that was a normal movement, maybe needed before make another bullish momentum targeting 1.5300 area. As you can see on my h4 chart below, the 1.4850 is not only a long term key level but also a 23.6% Fibo retracement of 1.4479 – 1.4965 proving that it is a very important and valid support level. As long as that support area hold, the bullish scenario should remains strong. I still prefer a bullish scenario in upcoming week. However, there are always two sides to every story right? Now let’s take a look on that other side of the story, the bearish correction.
On my weekly chart below, I see an interesting similarity between today’s and November – December 2007 movement. After a significant bullish movement, price found good resistance around 1.4950 area and corrected lower at 1.4309 before continued the bullish momentum, break above 1.4950 and peaked at 1.6019 on April 2008. Now, we also found the fact that 1.4950 area is not an easy resistance to be broken.
Thus, technically, a potential retreat to the downside, a bearish correction back to 1.4309 can not be ignored (remember, technical analysis believe that history tends to repeat itself), especially if we have a break below 1.4850 support area. However, whether we are going to have a bearish correction to 1.4309 or not, the big picture of EUR/USD is clear for me: bullish.
Have a great weekend and see you guys next week!