EURUSD: Upside Momentum With Cautious Hold Above 1.5000

EURUSD-A third consecutive week of upside gains saw EUR printing a 14-month high at 1.5059 and closing above its big psycho level at 1.5000 the past week. This current medium term upside strength is coming on the back of a rally initiated at the 1.4481 in early Oct '09. With that said, an extension of its current upside momentum is expected towards the 1.5082 level, its Aug 10'08 high with a loss of there exposing the 1.5283 level, its May 04'08 low. Its weekly RSI remains bullish to overbought. We are cautious of our call for further upside gains above the 1.5000 as another weekly close is required to maintain a firm hold on that level. However, if its Friday price hesitation develops further to the downside, we could see corrective declines towards its Oct 15'09 high at 1.4968 with an invalidation of there allowing for additional downside pressure targeting the 1.4844 level where its Sept 23'09 high is located. We envisage a hold in price at this level if tested as it should reverse roles and provide support thereby pushing the pair higher again. Further down, another support is sited at its Oct 12'09 low at 1.4672. On the whole, while EUR remains biased to the upside medium term, it must hold above the 1.5000 level to maintain that trend. The risk to this analysis will be a failure above the 1.5000 level.