EUR/USD: Pausing After a Sharp Rise
EUR/USD has moved sideways after breaking the strong resistance at 1.3004. The current mild correction suggests a continued weak selling pressure. Short-term support is at 1.3022. The next strong horizontal resistance is at 1.3284 (see also down trendline).
The lack of base formation or sell-off suggests that the current strength in EUR is a rebound within an underlying downtrend. Given the resistances area between 1.3150 and 1.3491 (38.2% and 50% retracements of the decline from May 2011 to July 2012), we are waiting for signs of weakness to initiate a short EUR position.