EUR/USD analysis (July 14, 2011)

As expected, we did see the pair confirming its bounce on top of the 200 moving average after a new low at 1,3830.
The daily chart is showing a nice morning star formation which might suggest a continuation of the move to the upside.
Today’s move will be very important from a technical stand point. If the EUR/USD closes back in its former triangle, we will consider a test of the upper band near 1,45. Inversely, a daily close below the triangle would validate a pullack and confirm the breakout. In this event, the bearish move would resume.
Considering the strengh of the bounce, we will stay on the sidelines until we get a clear directional bias. We still think though that the Euro will be under pressure over the middle/long term.