EURO Reversal Weighs Into Psychological 1.30 Level

By: MIG Bank | Tue, Feb 7, 2012
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EUR/USD's latest reversal beneath key resistance at 1.3250 (38.2% Fib- Jan/Oct decline) continues to weigh. Further bearish pressure remains from the recent candle pattern and intraday DeMark™ signals.

Only a successful challenge of 1.3250 will unlock an extended recovery into our next target zone at 1.3440/60 and 1.3548 (02nd Dec high).

Meanwhile, the bears need to push back beneath 1.3000 (psychological support), then 1.2879 in order to resume the major downtrend lower. We have re-opened a sell stop order in anticipation of this scenario.

Inversely, the USD Index is holding steady above key support level around 79.10, ahead of 78.30. The pullback had unwound historic speculative net long positions from the month of January (which tends to be seasonally positive for the US dollar).

Expect these levels to act as two of the last points of defence for a potential re-launch of the greenback’s recovery which is still part of our bullish cycle strategy for a further 20% gain over the multi-month period.

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Author: MIG Bank

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