For the past 2 weeks EU was bouncing off the 1.05 zone and it looked like bulls will be able to defend it. Because even if pound was dropping, euro was still defending the 1.05 area, everytime it went a little under, hawkish talk from the ECB made it spike above 550. Until thursday, when bulls gave up early in the London session and once the area broke, they were showing no more power…like they gave up. Here is the thing…340 is a very strong support for the euro, a multiyear support, if it broke, there might be a small flash crash below, but I don’t think it would be long-lasting. If you look at EG, it also broke a multiyear support not so long ago, many people thought its just a start for the bears, but to the contrary, EG started a bull trend since then. Anyway, 340 didn’t break yet…we had a stop loss hunt on friday, breaking the previous low just by a few pips and quickly reversing to the upside, ending the day above 400. Looking at other dollar pairs, EU is showing bottoming patters on smaller time-frames, GU the same, but also AUD and NZD…very strong bottoming patterns on H1. I mean…if this doesn’t bring USD down, I don’t know what will. As for bullish targets for the EU, we have a small top at 630, which was created during the FED meeting. So being long from 350-400, I would be cautious around 580-630, to see how the area reacts. If the resistance breaks, then 850-950 would be likely next. But lets take it little by little…asian session started to buy the EU recently, so lets see if they start the week by doing so.
