Having triggered a corrective recovery following its recent weakness to a low of 1.1875, risk of further strength continues to build up towards its June 1 high of 1.2353. A decisive cut through there will clear the way for a run at the 1.2451 level, its May 28 high where a halt may be seen.
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Further out, EUR/USD's May 21 high at 1.2671 comes in as the next upside target. This view remains valid while EUR continues to trade above the 1.2000/1.1875 zone. Its daily studies, which have pulled out of an oversold zone and are pointing higher, are supportive of this view.
Alternatively, a break and hold below the 1.1875 level, the 2010 low, will have to occur to annul its corrective recovery view and bring further weakness towards the January 2006 low at 1.1801. A violation of there will open the door for further weakness towards its major support at 1.1640 established in 2005. All in all, having triggered a corrective recovery, the pair now looks to build on those gains.
Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces
for his subscribers. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.