EUR/USD is weakening today after the recent sharp rebound above the key level at 1.3250 (38.2% Fib Oct/Jan decline).
Only further sustained confirmation above 1.3250 unlocks an extended recovery into our target zones at 1.3440/60 and 1.3548 (02nd Dec high). Our long position is now active in anticipation of this scenario.
Meanwhile, the bears need to push back beneath 1.3000 (psychological support), then 1.2879 in order to resume the major downtrend lower.
Inversely, the USD Index is holding steady above the key support level 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 this level to act as one 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.
