By Mohammed Isah of fxtechstrategy.com
: After the euro failed to break below the 1.3442 level vs. the dollar Thursday, we
that a corrective recovery appeared to be in the cards.
Sure enough, on Friday the euro rallied as high as 1.3682 before closing at 1.3629.
to view a chart of the pair.
We now expect the euro to follow through higher.
The first target is the Feb. 23 high at 1.3691. A turn above there would drive the pair toward the Feb. 17 high at 1.3787 and then the 1.3838/51 levels (the Feb. 1 high/Feb. 9 low).
We expect the latter zone to cap corrective gains and send the euro lower again. That zone is not absolute as a stall in price could occur ahead of it.
> > Bull or Bear? Vote in Our Poll
On the other hand, the threat to our analysis will be a break back below the 2010 low at 1.3442. That likely would trigger further downside pressure toward the 1.3422/09 levels, with a break of those levels setting the pair up for further weakness toward its June 3 low at 1.3211 and the important psychological level of 1.3000.
Overall, the pair retains its broader bearish structure in the medium term, but the risk is for a recovery higher in the days ahead.
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.