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
After three weeks of consolidation, the EUR USD blasted offto 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 was1.34350. Now that the market has regained this level, the market may straddlethis price this week in an effort to establish support. If buyers canaccomplish this, then the next upside target will be the 61.8 percent level at1.3627.
The uptrending Gann angle which stopped the break two weeksago 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 firstsign of weakness.
A downtrending Gann angle from the 1.4247 top comes in at1.3527. Not only does this angle split the retracement zone, but it also servesas a potential upside target. Taking out this angle could trigger anacceleration into the 61.8 percent retracement level.
One sign of extreme strength will be regaining a steepuptrending Gann angle at 1.3743. If the market can establish support at thisprice, then it is likely to accelerate into the next downtrending Gann angle at1.3887.
The 50 to 61.8 percent retracement zone is an upsideobjective for many traders especially since the main trend is down on theweekly chart. This means that bulls and bears are going to battle between1.3435 – 1.3627 this week. Long tradersneed to pay close attention to the price action inside of this zone becauseselling pressure may overcome buying pressure, putting the Euro in a positionto weaken. On the other hand, re-establishing support at 1.3435 will be astrong sign that sentiment has shifted to the upside.