Forex Signals - EUR/USD Bulls Come up Big

By IBTimes Staff Reporter | May 28 2010 1:11 AM

Daily Outlook: Bulls managed to push the pair up 180+ pips yesterday on a surge of risk appetite with most analysts pointing to China's confirmation that they were not pulling out of Eurozone investments. On top of that the 180 pip push completed a bullish engulfing pattern on the daily charts, which adds to the growing body of evidence that a bullish correction is coming. That evidence includes: the bullish engulfing candlestick mentioned above, the gravestone doji from Tuesday, the potential double-bottom now formed at 1.2150.

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It is a Friday and as usual I will take the day off, but if I were in the markets today I would be looking primarily for a long on a bounce off of rising trend support (now at 1.2260) or at 1.2215 support.

Trading Idea: I don't trade on Fridays. But if I did, my primary trade would be a long with confirmation in the 1.2260-1.2220 zone with long targets at 1.2290, 1.2320, 1.2350, 1.2380 and 1.2430 for 170+ pips profit. That trade might need a little breathing room as bears are likely to fight it. If we do see a sustained break below 1.2150 on the 1h charts or above then that is a very bearish signal and we could be looking at 1.2000 tomorrow. An aggressive trade is a sustained break on the bullish break of the falling trend resistance (the blue line my circled dojis are barely touching)