EUR/USD Weekly Technical Review & Trading Recommendations for January 30, 2012

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The EUR/USD pair is continuing the downward movement after the last September’s breakdown of the weekly support level located near the point 1.3960.

During the last two weeks, the EUR/USD pair experienced the bullish retracement which was quite specifically indicated in the two full-body green weekly candlesticks.

Now the pair is moving towards the resistance level corresponding to 38.2% according to Fibonacci level and the lower limit of previous consolidation zone (supply zone) around 1.3200.

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EUR/USD was trending down inside the marked RED channel when it managed to make a bullish breakout.

The retracement is quite strong which is considered a threat for the bears if it continued on the same way.
The previously mentioned resistance levels are even more obvious on the daily chart above. It is necessary to mention that we have a stronger resistance level located around 1.3560-1.3600 which is equal to the level 61.8% according to Fibonacci and the upper limit of the mentioned supply zone.


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On the 4H chart, the bullish retracement occurring which is contained inside the marked blue channel is obvious.

Last Friday, the EUR/USD pair was testing the upper limit of the channel at level 1.3230 when it faced strong bearish pressure.
Now the pair is expected to target the lower limit of the channel at 1.3050 which is crucial for determination of the next target for the pair.

The 1.3050-1.2950 area is the most prominent DEMAND (supply) zone for the pair in the short-term prospective. In case it broken the pair is to resume the long-term downtrend which was identified on the Weekly chart.

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