Out Of The Range With Potential For A Run At The 1.3857/82 Level.
EURUSD– A sharp rally through the 1.3330 level, its Jan 27’09 high/range top saw EUR follow through on its morning star(bottom reversal signal) formation highlighted in our previous week analysis to close week higher at 1.3582.With a clearance of its range top between the 13330 and the 1.2330 levels and a loss of its Jan 19’09 high at 1.3386 seen, nearby resistance residing at the 1.3799 level, its Jan 08’09 high is now being targeted ahead of a bigger resistance zone at the 1.3857/88 levels,its.618 Ret(1.4719-1.2330 declines)/Sept 11’08 high. While pullbacks cannot be ruled out on its way to further upside, other key resistance levels are seen at the 1.4363 level, its Dec 29’08 high and then its Dec 19’08 high at 1.4719.This level is very significant as a cut through there will not only resume its recovery off the 1.2330 level in Dec’08 but confirm its potential double bottom chart pattern drawn in Oct’08 and Mar’09.This will put the pattern price target if it occurs way above its all time high at the 1.6038 level. Weekly stochastics and RSI are positive and heading to the upside supporting this view.However,nearer term corrective pullbacks could occur especially now that its daily studies are overbought and Friday trading session saw a negative close. In such a case, its weekly ema currently at the 1.3463 level will come in as the initial downside target before the 1.3330 area, Jan 27’09 high where a break will put attention on the 1.3093 level, its Feb 09’09 high and subsequently the 1.2992/1.3000 area, its Feb 23’09 high/psycho level. On the whole, with range break out seen, potential for further upside exists.
Performance in %:
Past Week: +5.75%
Past Month: -1.00%
Past Quarter: -1.05%
Year To Date: -2.79%
Weekly Chart: EURUSD
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