The weekly chart shows potential for further moves up, possibly to the dashed line I drew in parallel with the uptrend line, assuming an EW type of correction. This would imply a high of 1.3726 before correcting downwards. One could also calculate an EW correction of a C wave on the weekly chart as ranging from 1.3498 (C= .618 of A), 1.4071 (C=A) or 1.4998 (C=1.618 times A and at which the Euro bears would be deep underground).
However Euro is in a zone of heavy resistance in the 1.35 area and while Euro bulls are galloping about, the bears are in there selling which accounts for the stalling. I may try a short around 1.36 or before, depending on momentum behavior (as represented by RSI) on the hourly chart. There's negative divergence on that chart so if it continues with the new highs then it's a sell signal. However bearing in mind the weekly channel, one would of course want a tight stop. I'm definitely going short if the pair reaches 1.3720. As for going long, I'd try one on a pullback to 1.3335.
Support is at 1.3520, 1.3469, 1.3335, and 1.3229 (50% of the move down from 1.4581 to 1.3229). Below 1.3000 would be devastating. Resistance is 1.3556, 1.3600, 1.3692, and 1.3720.
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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