After a steep slide, the EURUSD starting recovering in the latter portion of last week, rising from 1.3450 to nearly 1.38. On the way down price broke through the 1.38 support level without much trouble, but that won’t necessarily happen on the way up. Expect a pause, around 1.38, and which may be a good place to go short. The technical picture may be muddied by the fundamental news focusing on the Irish bailout, so caution would be advised.
Although off its highs the trend in the Pound remains strong, with prices hovering right around support at 1.60. Expect a breakout from the channel to the upside, which is really a bull flag, with prices consolidating after the October rally. If prices succeed, they should quickly rise to retest 1.6250 and possibly rise to 1.65 (the measured projection fo the bull flag).
Prices continue to bounce off the 1.0000 level, but each bounce has been weaker, forming a descending trendline that has kept the rise in check. Expect the trendline to hold, and for another fateful test of parity. With the dollar bulls weakening on each attempt, there is a good chance that the USDCAD will finally break through and head towards its 2007 low near.9100.
Written by bforex.com