Two scenarios for the Euro after hitting 1.3310 area

Participation on the long side started on July 10, 2013 showed once again bulls and Program Trading (based on our model) defending the area of support known since the beginning of February 2013. This area starting at 1.2910 and extending down into the 1.2716 level of failure has been successfully tested now 3 times. This is very significant because as a consequence the 1.4110 target for the Euro is still in place.

The market moved higher in the daily chart following traditional movements, modeled by our framework. The 1.3310 area is going to be 1st target for the long entry identified last week in the 1.2990 area. The second target of that long setup would be the 1.3480 area.

Euro FX currency futures daily chart, July 29th 2013
Picture: "Euro FX currency futures continuous contract daily timeframe, July 28th 2013"

I see two potential scenarios at the moment (refer to above picture):

Scenario 1. price of Euro could just continue higher into the 1.3480 area without pause. This is the preferred and most probable scenario.

Scenario 2. after reaching the 1.3310 area we could witness some profit taking bringing price at the the next support area starting at the 1.3160 area. There it is possible that a bounce could take place followed by a continuation higher.

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