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By , Sr. Technical Strategist
16 July 2013 19:28 GMT

EUR/USD Enters Resistance Zone before Bernanke Testimony


eliottWaves_eur-usd_body_eurusd.png, EUR/USD

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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FOREXAnalysis: Keep high volume areas of 1.3242 and 1.3294 (post FOMC close) in mind but don’t lose sight of the fact that 1.3200 held for 4 days and has produced important tops in recent months (April high and 5/8 high). I wrote Monday about the possible flat correction, noting that “it’s possible that a flat correction is underway from the 7/11 low. The implications are for price to trade above 1.3121 before declining sharply. Resistance extends to 1.3174.” The EURUSD has traded into 1.3145…the resistance zone does extend to 1.3174.

FOREX Trading Strategy: 1.3205 is viewed as a tradeable high. The USDCHF drop below its 7/11 low creates divergence with the EURUSD, which is in place as long as price is EURUSD is below the 7/11 high. How you deal with positions around news events is up to you but I have no qualms trading from the short side below 1.3205. It’s always best to enter during active hours of course (Europe or US for EURUSD). The target is 1.2930 (high volume area at 1.2921 and Fibonacci at 1.2927). If stopped out then the next area for a top is 1.3270/95.

LEVELS: 1.2921 1.2992 1.3090-1.3105 1.3174 1.32051.3242

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16 July 2013 19:28 GMT