Spot EUR/USD Forecast for 01/29 by Daytradeideas.com

EURUSD failed just below the 2012 high of 1.3486 at Friday’s high of 1.3479 to form a very small double top. We are approaching major long term resistance here with weekly 50% Fibonacci target of 1.3491 and again this is a very important long term resistance level plus we have the 200 week moving average just above at 1.3529.

With the market very over bought on weekly and daily charts the 1.3479/91 resistance area should trigger profit taking after 6 months of strong gains and it may not be wise to run longs any further in case we hit selling pressure. Even if we do push higher we run straight in to 1.3529 and so if attempting shorts here we would use a stop above 1.3580.

A drift lower to the 9 day moving average and short term 23.6% Fibonacci support at 1.3375 may now be seen this week. If we continue lower we could test strong support at 1.3286 and the chance of a low for this week at least. A rally back to retest the 1.3479 high could follow before steeper losses in to February.

Long term levels

1.3529     200 Week Moving Average

1.3491     Weekly 50% Fibonacci

1.3486     2012 High

1.3479     Last week’s high

1.3378     100 Week Moving Average

1.3381/86     April 2012 High

1.3284     May 2012 High

1.3265     Last week’s Low

1.3150     Weekly 50% Fibonacci

1.3140     October 2012 high

The article was first published by DayTradeIdeas.com