The EURUSD was indecisive this week, made a Doji on weekly chart. Now let’s take a broader look on weekly chart below and see what kind of information we can get, at least from my subjective perspective. Price has been moving in a triangle formation, suggests a consolidation phase. No clear direction until a break above or below the triangle. From the past historical movement, we are now in a phase where 1.3500 is a key support/resistance area and a move above or below that area could determine the next direction. From this point of view, although the bullish momentum was paused this week, the fact that price still move above 1.3500 still suggest more bullish bias for now, but need a clear break above 1.3800 (March 2010, June and July 2007 high) to continue the bullish scenario testing the 1.4000 and the upper line of the triangle around 1.4200 – 1.4300. On the other hand, a consistent move back below 1.3500 next week would be a threat to the short term bullish bias as a false breakout scenario could be produced, testing 1.3250 even back below 1.3000. Of course, there is always another scenario beside bullish and bearish that we could have in weeks to come, a sideways scenario as what happened in the blue box at the chart, before made a strong break to the upside and hit 1.6038 on July 2008. Be ready to whatever happens next week and as always, trade what you see, not what you expect.

Have a great weekend and see you guys next week.

©2011 FX Instructor Forex Blog - For Traders, By Traders. All Rights Reserved.