Daily Outlook: Things should pick up today though, and the driving force recently have been the bulls. I still remain long-term bearish on the pair (on technicals) but a healthy correction was needed and, quite frankly, over due. The pair has dropped 3000 pips since December of 2009 - we sold the entire way down, FYI :) - and this is definitely the most significant correction we've seen so far.
On the daily charts however, we do have an inverse head and shoulders FORMING (it has not completed yet and so is not yet valid) on the daily chart which is a short-term bullish signal. The head tips out at 1.1875 and the neckline is at 1.2580. A close on the GMT daily charts above 2580 is necessary to complete the signal and would open up a re-challenge of 1.3200 (100% retrace of neckline to top of head).
Not a whole lot on the EUR/USD forex calendar today. As always make sure to watch the candlestick alerts for short-term trading clues. Also a few brokers have reported low volume over the past few days. If that continues today it gives short-term setups a little higher probability than usual.
Primary trade will be a long on a pullback to the 1.2400-1.2430 support range, with targets at 1.2440, 1.2470, 1.2500 and 1.2530 for 100-140 pips profit.
A more aggressive trade would be a long near 1.2480 targeting the top of the short-term range we are in right now at 1.2549 for a quick 60 pips.
The most conservative trade is to wait for a pullback to the former falling resistance (top blue line on chart) currently at 1.2340. You can get some great risk/reward ratios at this level targeting 1.25 and 1.26.