After the sharp decline that took the euro below 1.19 areas, the pair is reversing to the upside in correction powered by positive momentum signals. The current incline takes the pair to retest the previously breach critical support at 1.2140 –the neckline for the pattern above- where it a lmost resides with the resistance for the short term descending channel.
The secondary image shows a positive pattern with the neckline at 1.2065, breaching it will support the pair’s upside move though its full targets reside above the retest level mentioned at 1.2270 -50% correction for the last downside wave- and it might extend further towards 1.2365 the 61.8% correction.
The medium term trend is still bearish and we should observe the pair closely when reaching the retest level at 1.2140; breaching this level will extend the upside correction as aforesaid, while if it holds it will revive the bearishness towards the main targets for the short term wave around 1.1700.
By: Yasir Mubarak
Main Technical Analyst