EURUSD: Topples The 1.5062 Level, What Next?
EURUSD: After exactly one month following its loss of upside momentum at the 1.5062 level, EUR was seen decisively breaking through that level on Wednesday as well as the 1.5082 and the 1.5100 levels to close higher at 1.5132. This victory and its medium term resumption is coming on the back of a corrective decline to as low as 1.4625 level on Nov 03'09 and its subsequent rallies mixed with failed attempts ahead of the 1.5062. With a new leg of bullish medium term upside activated, the question now is how far can the pair go? Based on our quarterly technical outlook for the pair utilizing the weekly chart, the next stop (resistance) is at its May 08'08 low at 1.5283 with a cut through there targeting its Aug 04'08 high at 1.5630 ahead of the 1.5766 level, marking its July 28'09 high. The monthly and weekly RSI are positive and trending higher suggesting further upside strength. While the energy built from its corrective declines and the subsequent consolidation followed with its current breakout gives us some confidence that the said breakout would be sustained, we will still wait for our old and reliable weekly closing basis principle to play out in the next 48 hour to provide additional confidence of the pair's present breakout. With that said, pullbacks if seen should target the 1.5100/1.5082 levels at first with a loss of there turning attention to the 1.5062 level where a reversal of roles is expected to turn the pair back up again. Further down, support is positioned at the 1.5000 level, its big psycho level. On the whole, with one month of correction finally resolving to the upside and triggering the resumption of EUR's medium term uptrend, risks are now seen towards the 1.5283 level and beyond.
Weekly Chart: EURUSD