Forex Trading: EUR/USD From A Longer Term Perspective

The EURUSD, apart from the swift short covering rally in December, has been confined by 1.3300 on the upside and 1.2400 on the downside.  Of late, the pair is in a downward channel that has 1.2981 as the upside reistance, and 1.2383 as the current downside support.

From a longer term perspective, the market will want to see a break of either of these extremes to get excited for the pair.  With the momentum to the upside today and the strong bounce and volume from the 100 hour MA on Tuesday (see previous post), the momentum to the upside is tempting.  However, the moves of late to the upside and downside all look and feel the same, only to fall short and quickly reverse.  The difference today, however, is the strength in the cross pairs like the EURJPY.  This may be the catalyst that breaks the EURUSD out.

I will still want to see the break above the 1.2981 level to believe it.

What do you think?  Stay tuned.

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