EUR/USD Update: August 3, 2012
Rajoo C | Aug 03, 2012 03:06AM ET
The pair has been trapped in a multiyear triangle consolidation between 1.4950 and 1.1870. We prefer to view the setback from 1.4945 (May’11 high) as wave (D) of the large triangle which is likely to retest the key swing low at 1.1870 on multi-month basis (even a push lower is possible). The 1.2695/1.2750 resistance is critical level for the bearish view ahead of 1.3000. A reversal above however would refocus on 1.3485.
EUR/USD has bounced back from 1.2040 with a break of a falling wedge pattern. The corrective bounce could be a wave 4 which has the potential to test the 1.2500/1.2550 (38.2% retracement level) resistance with potential bullish divergences in daily oscillators. Near term setback from 1.2400 may be a wave [b]. Holding the 1.2040 support may allow another push above 1.2400 in a wave [c]. A reversal below 1.2040 however negates the near term bullish outlook. A break above 1.2550 would expose the tough 1.2690/1.2750.
Anantharajan .P, CMT (Technical Strategist, Precise Trader)
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