EUR/USD Bearish Momentum Unwinds From Oversold Conditions

By: MIG Bank | Tue, May 15, 2012
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EUR/USD's bearish momentum is temporarily unwinding, having overstretched beneath psychological support at 1.3000. Our model portfolio remains short, with a breakeven stop.

While the market holds beneath 1.3000, expect the important multimonth reversal pattern to extend into 1.2626 (16 Jan swing low).

Meanwhile, only a sustained daily close back above 1.3000 and 1.3284 (01st May high), puts this scenario on hold for a potential recovery into our upside target zone at 1.3412/60 (200-day average).

Inversely, the USD Index recovery has paused above its multi-week triangle consolidation. Support remains at 79.80 and 78.40.

Expect these levels to act as one of the last points of defence for a relaunch of the greenback's recovery which is still part of the bullish cycle into 80.73 (15th March high) and 81.78 (13th Jan swing/12 month high).

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MIG Bank

Author: MIG Bank

MIG Bank

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