EUR/USD Technical Analysis – FX Price Action Update – WC 31st December
- EUR/USD has been trading in a consolidation phase which has culminated in an “inside week” candle formation.
- The 1.3171 area previous resistance level has acted as support, and the 1.3307 19/12/12 pinbar high has not yet been taken out over recent trading. Euro/dollar has been oscillating between these perceived value areas, with a sustained breakout of the inside week potentially providing a directional bias going forward.
- The prevailing trend - heading into the end of 2012 – has been bullish. Nonetheless, a sustained continuation move above 1.3307 is now needed in order to negate the pinbar.
- Large speculators from the CME (Chicago Mercantile Exchange) continue to align themselves with this trend and have further cut bearish EUR FX positions, taking the net short EUR position to 2549 contracts and an associated $420 million as of last Tuesday. This is the smallest net short EUR FX position of 2012 according to the latest COT report.
- Going forward, a break above the recent highs could bring the FE100 expansion of 1.2661 > 1.3125 > 1.2875 into focus which is located around 1.3337. Further to this is the prior resistance around 1.3380 and the 50% corrective retrace and 1.3500 confluence level.
- Any sustained downside would have to to contend with the following levels: the aforementioned 1.3171 previous range highs, further to this is a 38.2% Fibonacci retrace level just above the 1.3125 previous highs. Any extended downside could see the 1.3100 handle as a focus which is just above the 13/12/12 daily high – and aligned with a 50% retrace level.
EUR/USD Daily Chart – Week Of 31st Dec 2012 – 4th Jan 2013
EUR/USD Weekly Chart – Week Of 31st Dec 2012 – 4th Jan 2013
Euro/Dollar Technical report, Forecast, EUR/USD Outlook, Forex Price Action Analysis.