The EURUSD has broken the .786 retracement AFTER breaking out of the downtrend line. Should see a pullback since the last move is unsustainable and then the target is the R5 @ 1.2528. Watch the 1.2500 EVEN NUMBER AREA!
Ozzie broke to the S5 0.8469 yesterday and bounced. The failure to retrace to the 0.382 and return to the bottom holds out the bearish sentiment. Looking for the Cross to consolidate since we have Non Farm Payroll this week. However, a break of the S5 targets the .270 fib extension @ 0.8384.
The EJ has followed through to the 1.270 fib extension from the first leg. Currently we are building a bear flag so will look for more follow through back to the 1.270 and then the S5 target at 107.13.
The USDCAD has corrected to 1.0430 equaul to the downtrend. Typically the third test holds and we could see a swift retracement back to 1.0286 ( 50% retracement and S3). A break north would target the R5 and the .270 fib EXTENSION.
The EURUSD took out our top yesterday and has corrected since then. It is at the decision point - bounce on the trend line and keep the up move in place. If so, I would expect some consolidation before the move to the 1.2600. The bearish scenario is a break of the trendline and a move back to the 1.2274.
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WHAT ProAct Traders SEE: We have continued to march northward as the dollar continues to strengthen. Looking to continue to the .786 retracement which is also the resistance - R6 of this move. There is resistance also there from the day chart so expect sellers will enter there.
At this juncture, price has tested 1.24 with still an upside resistance at 1.2467 (set 10/27/2008) as a triple top on the Hourly while also forming a head and shoulders. It’s also the end of the week. So, it seems quite possible that, with the pair having trended up for 2 weeks now, that a retracement / profit-taking session may be due. Another test of 1.24 will likely lead to an extension of 1.2457-67. Will look for sellers there and a square up on Friday then back to the 1.2324(S3) or lower.
Still room to go on this up move. Next target is the 1.2456 (.618 fib extension and former top). I think we have enough bulls to get to the .786 fib extension and the .786 fib retracement of the big down move. Looking for sellers at that level.