Weekly Trend Direction: Bullish

Weekly Trend Reversal Level: 1.2725

Key Support Levels: 1.2820, 1.2700, 1.2600, 1.2500

Key Resistance Levels: 1.3000, 1.3100, 1.3300

Entry Strategy: Buying dips in an uptrend at support levels, while market trades above trend reversal level.

Trade Suggestion: As we look at the charts this week, the weekly closing turned out to be a doji, which leads to indecision in market, but if we consider it has made new high last week and yet to make a new low, this means that uptrend is still in place.

If we look at fundamental point of view, last week's market was waiting for EURO Bank Stress Test results, which was released late Friday US session. Out of 91 banks that were reviewed, only 7 banks failed the stress tests; five Spanish banks, one German bank and one Greek bank. Though results came out positive for EURO, we won't read much into it. The Doji on market closing may be due to market waiting on these results. We will still stay bullish on this pair from a technical point of view and fundamental point of view, but we will be cautious as the long term trend is still Bearish.

Technically this pair is still trading below 1.3000 key level which is a strong resistance and a 61.8 fib level from its fall from 1.3691 to 1.1875. If we look into much more details the fall from 1.3028 to 1.2732 is holding 23.6 fib level from its rise 1.1875 to 1.3028, and it has broken weekly bearish trendline, which signifies bullishness. But the range now is getting narrow which is 1.2732 to 1.3028. Price has to break out of this range to get momentum in place. We will closely look into the price action which happens in this range.

If we look into last two days of trading activity this pair has not made a new low or new high, suggesting indecision, and furthermore it seems to be forming a symmetrical triangle on 4 hours chart and also moving in a bullish channel, which is a continuation pattern leading to further bullish behaviour. The significant level after the break of 1.3000 on this pair will be 1.3100, where the bearish daily trendline comes into place.

Our recommendation is to look for long entries above our sighted trend reversal level which stays at 1.2720, targeting 1.3000, 1.3100 followed by 1.3300. If this pair breaks 1.2700 level, it might fall to 1.2500 level before making another move. Aggressive trade will be going short after a sustained break of 1.2700 level with targets 1.2600, 1.2550 & 1.2500

Alternate suggestion: Any breach of our suggested weekly trend reversal level will open up doors towards 1.2500, 1.2000, 1.1875 & 1.1639