EURUSD: Momentum Remains To The Upside

EURUSD - A second week of upside gains the past week saw the pair wiping out its corrective losses and breaking above the 1.4844 level to print a new high of 1.4968, its highest price since Sept 22'08. The challenge now is how EUR reacts as it approaches its big psycho level at 1.5000. We believe this should pose a threat at first(as evidenced by its Friday price failure at 1.4968) which could trigger another correction but if this view is voided and a loss of the 1.5000 level materializes, we could witness a run at the 1.5082 level, its Aug 10'08 high and then the 1.5283 level, its May 04'08 low. Its weekly RSI is bullish and trending higher suggesting further upside though ion overbought zone. Conversely, if its price failure at the 1.4968 level builds more downside strength the coming week, risk should shape up towards the 1.4843/42 level, its Sept 23'09 high/Oct 15'09 low. That level is expected to fence off the bears and turn the pair back up but if that it gives in, the pair could see further declines towards its Oct 12'09 low at 1.4672 with a violation of that level paving the way for further downside pressure towards the 1.4479 level, its Oct 02'09 low and next its MT rising trendline currently at 1.4432. On the whole, EUR retains its broader medium term uptrend but faces the risk of a correction as its approaches its big psycho level at the 1.5000 level.

Weekly Chart: EURUSD