Previous: EUR/USD Attacks Counter-trend Trendline (2/17)

EUR/USD

As the EUR/USD rebounded from 1.2974, it faced a cluster of resistance on Friday. These included the 200 hour simple moving average, a counter-trend trendline, 61.8% retracement (1.3188) of 1.3320-1.2974, which was also a previous resistance pivot on 2/15 . As the trading week of 2/19-2/24 starts, the EUR/USD pushes higher, breaking above the cluster of resistance factors. The RSI also kissed 70 showing bullish momentum. This should open up the bullish continuation scenario.

To the upside, 1.35 would be conservative target, while the 1.3626, 61.8% retracement and declining trendline resistance cluster would be a more aggressive target (1.36 being a psychological resistance to monitor as well). A measured move projects even a little higher, near 1.3650.

Watch for a throwback. If the market fails to break back below 1.3160, it is very likely the that this bullish continuation scenario will pan out.

On the other hand, falling below 1.3150 suggests the initial jump to start the week might be a bull trap or false breakout. Then, a return below 1.31 suggests another bear run like the one we had last week. 1.30 would be the initial target. The 4H chart below shows this as a neckline to a dpossible head and shoulder. A break below 1.30 thus suggests topping and a return first toward 1.2850-1.2870 pivot zone, before re-testing the 1.2623 2012-low.

This analysis is of a snapshot of the market and the anticipation based on the current conditions. Things may change, and adjustments are often needed especially when preparing for a trade. To follow up and explore trading plans and risk management techniques as well as fundamental bias and event risks, don’t miss IBTrade’s daily Market Intelligence Briefings live at 8:00AM EST throughout the week. To gain free access to these sessions, register at here at IBTrade. You will receive and email with the link and password before each session once you have registered.

Fan Yang CMT is a forex trader, analyst, educator for IBTrade; and main contributor for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.