The Euro had a bang-up week last week, closing at 1.3618.
On the weekly chart, the pair has aggressively climbed back above the broken downtrend line, suggesting an optimism for the pair, based on what besides hope (always dangerous), I do not know. Regardless, that's two weeks with a higher high although only one with a higher low.
The high a few minutes ago was 1.3649 and there's little reason to not believe the hopes can carry the pair to 1.3786, the November high. 1.3578 was the 50% retracement of the move down from that high to 1.2874; 1.3744 will be the .618 retracement level and a place where there will most likely be some profit-taking from those who haven't completely drunk the Kool-aid that turns otherwise reasonable people into frothing at the mouth Euro bulls. However, if those bulls get it above 1.3860, the stage will be set for hopes to the 1.4060 (downtrend line from 12/2009 on weekly chart below) and the 1.4283 high. I'd definitely short there.
The move up on the weekly chart doesn't look impulsive so it must be corrective if examined from an Elliott Wave perspective. Note, too, that RSI is still below its uptrend line. The expanded flat nature of the correction could carry it higher. However there may be short-term opportunities for longs.
Support is at 1.3500, 1.3457, 1.3245/20/00 (strong), 1.3154 and 1.3000 (big psychological).
Here's the weekly chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
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