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EURUSD Bounce Seen as Opportunity to Add to Short

Monday, 21 May 2012 11:01 GMT

by  Ilya Spivak, Currency Strategist

I initially sold EURUSD at 1.3121 and added to the position at 1.3026. The pair sold off after putting in a bearish Harami candlestick pattern and I revised my objective to 1.2674 – the 50% Fibonacci expansion level – as well as trailed the stop-loss to breakeven (1.3073) after prices met the initial downside objective. Prices mounted a brisk recovery as expected to close out last week and may continue to correct higher as oversold conditions are digested. I will treat reallies as an opportunities to add to the short position in the days ahead. The first layer of significant resistance lines up in the 1.2865-87 area, with a minor barrier at 1.2793 before that.

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