EURUSD failed just below the 2012 high of 1.3486 at Friday’s high of 1.3479 to form a very small double top. We are approaching major long term resistance here with weekly 50% Fibonacci target of 1.3491 and again this is a very important long term resistance level plus we have the 200 week moving average just above at 1.3529.
With the market very over bought on weekly and daily charts the 1.3479/91 resistance area should trigger profit taking after 6 months of strong gains and it may not be wise to run longs any further in case we hit selling pressure. Even if we do push higher we run straight in to 1.3529 and so if attempting shorts here we would use a stop above 1.3580.
A drift lower to the 9 day moving average and short term 23.6% Fibonacci support at 1.3375 may now be seen this week. If we continue lower we could test strong support at 1.3286 and the chance of a low for this week at least. A rally back to retest the 1.3479 high could follow before steeper losses in to February.