FX.co ★ EUR/USD Weekly Analysis for August 24, 2012 (Weekly Strategy)

The euro-dollar has overcome the psychological level of 1.25, recording a maximum at 1.2588; this optimism will not last long. In an uncertain environment like we have at this time, the U.S. dollar generally remain desirable. In addition, there is a real debate about whether the Fed made ​​some kind of monetary easing before the election. If that is the case, the interest rate differential will still remain relatively small.
As for the long term trend, it is certainly lower, the analysis in weekly chart shows that the euro is below the bearish secondary line. There may be a final rally to 1.2650, as these levels will reach the beginning of the bears, it has a strong downtrend. Any news and deficit in the euro zone will push down the pair.
Therefore, we recommend selling on the level of resistance 1.2650 with targets at the support near1.2100 weekly. This level will be a key monthly close below this level will result in a fall to the next support 1.18.
Regarding buying the euro, do not suggest doing until we're above the 1.27 level, and would rather lose a good business opportunity, rather than buying resistance.

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