EURUSD: The 78.6 fib is at 1.1998
|EUR/USD
The 78.6 fib is at 1.1998..and we have touched this already....So now where...Do we have enough legs to actually move this market higher through 1.20...The chart patterns suggest not...We cannot ignore the H&S pattern formed...but as I said this is possibly the most unreliable pattern unless built up ovr a long time on the weekly charts...and I am not seeing it on this timeframe....Now from extreme overbought conditions on the weeklies....we have eased back to just under 80%....although high...in strong trending markets these indicators really stay up at the higher end of the scale on the longer term time frames...so do not be daunted that these indicators are high....The downward / sideways action of the past few weeks is what was required to take the market from severe overbought levels..
Now we have a bit of work to do on the topside before we are clear of the congestion pattern....but the market pulled back exacyl 23.6 of the move up from 1.1320...so this is quite a bullish factor..as it the med term tech indicators which are currently neutral to pointing higher...We are in an uptrend....so until something changes you are much safer buying into any short term weakness...The key level on the downside is 1.1850 and this I believe will be a difficult level to break below...
The long term monthly level to clear is 1.2180...If done there is no reason at all why we cannot trade upto 1.2370 and then the 1.26 area...which as Iv said previously will be quite a tough level to break above...
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