EUR-USD: Headed Higher Medium Term

By Mohammed Isah of fxtechstrategy.com

EUR-USD: The euro put in a negative performance vs. the dollar this week following its failure at the 1.5014 level, its Nov. 16 (Monday's) high.

Click here and scroll down to see a chart of the pair.

However, as long as the pair can stay above 1.4782, which marks its medium-term rising trend line, or its Nov. 3 low at 1.4625, we expect it to eventually resume its broader medium-term uptrend.

With that said, the pair looks headed downward in the near term. The immediate threats are the aforementioned 1.4782 and 1.4625 levels. A break of the latter would deepen the retracement and expose the 1.4479 level, the Oct. 2 low. The weekly relative strength index is bearish and pointing lower, supporting this view.

Conversely, a halt of further downside losses should put the pair on the path to further gains toward the Nov. 16 high at 1.5014. A break through there would make the next target the year-to-date high at 1.5062. A settlement above the latter level will resume the pair's medium-term uptrend and set the stage for a move toward the 1.5082 level, the pair's Aug. 10 2008 high, and then 1.5283, its May 4, 2008 low.

On the whole, we retain our medium-term bullish outlook on the pair, although it may see corrective pullbacks.

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