FX.co ★ EUR/USD Corrective Movement, Janaury 17, 2011 (Weekly Strategy)

EUR/USD

The 1.3380 resistance level is a real test for the Euro – United States dollar pair on its way towards the previous highs around 1.4000. For now, the pair has entered an especially narrow shuffle, which may end in an upwards breach, first towards near resistance level of 1.3620, and later up to the resistance level and exit goal of 1.3970. A close above the 1.3390 level will form a buy trigger.

The possibility for worsening of the European debt crisis exists. Such development would lead to a new wave of downwards movement, expected to bring the Euro – United States dollar pair back towards the 1.3060 support level. This level is low enough for collecting the pair and entering a buy position, while a stop loss order may be placed at 1.2800 United States dollars for one Euro.