After three weeks of consolidation, the EUR USD blasted off to the upside, closing slightly better than a key 50 percent retracement level. Based on the weekly main range of 1.4247 to 1.2623, the first upside target was 1.34350. Now that the market has regained this level, the market may straddle this price this week in an effort to establish support. If buyers can accomplish this, then the next upside target will be the 61.8 percent level at 1.3627.
The uptrending Gann angle which stopped the break two weeks ago moves up to 1.3083 this week. This angle may act as a guide for the Euro, or it may be tested as support. Breaking through this level will be the first sign of weakness.
A downtrending Gann angle from the 1.4247 top comes in at 1.3527. Not only does this angle split the retracement zone, but it also serves as a potential upside target. Taking out this angle could trigger an acceleration into the 61.8 percent retracement level.
One sign of extreme strength will be regaining a steep uptrending Gann angle at 1.3743. If the market can establish support at this price, then it is likely to accelerate into the next downtrending Gann angle at 1.3887.
The 50 to 61.8 percent retracement zone is an upside objective for many traders especially since the main trend is down on the weekly chart. This means that bulls and bears are going to battle between 1.3435 – 1.3627 this week. Long traders need to pay close attention to the price action inside of this zone because selling pressure may overcome buying pressure, putting the Euro in a position to weaken. On the other hand, re-establishing support at 1.3435 will be a strong sign that sentiment has shifted to the upside.
