EUR/USD still looking bullish

Hello all,

I hope everyone is having a great weekend. At this time, I urge everyone (if you have not) to participate in the poll above.

I have charts on the popular currency pair – the EUR/USD pair. Thankfully, my last post on the EURUSD proved to be a good one, as the confirmed bull flag ran its course. Now, I have looked at the EURUSD chart again, and I am still seeing bullish signs – this time, slightly longer – term ones.

On the weekly chart, you will see that I have highlighted a confirmed head and shoulders pattern. This one spans about half a year, and comes with an upward breakout. If you are new here, and do not know what I do expect from this popular pattern, please click on this link to read more:

The head and shoulders pattern was confirmed – with price breaking out northward. What I will be looking for in such a situation is for price/rate to rally to the level of the head. In the EURUSD chart, the head would be the 1.4000 region. A bull flag (in orange trendlines) fuelled the rally coming out of the right shoulder. On the weekly chart below, you will see that the EURUSD pair has just gotten above the 200-week MA – albeit just above only, but it still should be taken as a bullish signal for now. Also, the strong red resistance trendline has just been broken. So from these points, I am getting an indication from the chart of further upside in the EURUSD, or in other words, continued selling pressure on the US Dollar. I would be looking for the EUR/USD pair to get to the 78.6% retracement level of about 1.4400.

On the daily chart, you will see an upward parallel channel that I have drawn, showing the recent uptrend in the EURUSD. The chart of the EURUSD tells me that the US Dollar does not seem like it should be reversing its recent weakness. I would be adopting a “buy the dips” mentality.

All analyses, recommendations, discussions and other information herein are published for general information. Readers should not rely solely on the information published on this blog and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.


One Trackback

  1. By Forex – USD « TechnicalAnalysisTalk on June 8, 2011 at 8:51 PM

    […] Take a look at this link for my last post on the EURUSD: […]

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: