The EURUSD recovered significantly this week. Price attempted to push lower on Wednesday, bottomed at 1.2143 but whipsawed to the upside, topped at 1.2671 and closed at 1.2571 in a high volatile market. On weekly chart below we can see that price retreat to the upside, touched the major trendline support and seems ready to make further upside pressure challenging the trendline support next week. So we are in a critical technical phase now. A consistent movement back above the trendline could trigger further significant bullish momentum as a false breakdown scenario maybe produced. Also we all know that this significant upside correction was triggered by a massive force: Intervention.
Although there are some big players try to go against the intervention by selling the Euro (which explain why we see high volatile market and price never really made a convincing bullish candle on daily chart) and the Euro zone fundamental outlook remains in negative territory, I think the major bearish scenario (which is still exist) has a serious threat here. For the in coming week, if price able to convincingly move above the trendline support, further upside correction towards 1.3000 area maybe seen. On the other hand if price fails to break above the trendline and move below 1.2260/80 support area, the bearish scenario may continue targeting 1.2000 region. It’s a difficult market and regardless of what will happen next week, the best thing you can do is just stay with your own trading plan and system. Don’t change or compromise your system just to try to “catch a golden opportunity”. Unless your trading system criteria met, don’t trade.
Have a great weekend and see you guys next week.
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