EUR/USD Analysis – Week Starting April 29th 2012

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EUR/USD 4hr Chart Analysis

EUR/USD Last Week

In last weeks analysis I mentioned that the 1.3190-1.3210 Support and Resistance area could either act as support or resistance as the price was going to open on top of it. Well the price opened just below the 1.3190-1.3210 area so it acted as resistance and cause a massive reversal at the start of the week. The price dropped right through the minor support line at 1.3165 but got stopped in it’s tracks when it hit major support at 1.3120-1.3140.

eurusd analysis last week

After hitting support a very nice reversal trade formed which I entered for +70 pips. The trade was risky and slow moving but the set up was strong. Unfortunately I was not able to record the entire trade, I only recorded the entry so I was unable to make a live trade video of it.

eurusd analysis reversal trade

After the reversal price got stuck on top of our 1.3190-1.3210 resistance area again. The price struggled the break the minor resistance line I mentioned last week at 1.3230. Eventually the Bulls pushed up to the next major resistance area at 1.3265-1.328 and the 1.3190-1.3210 became support. Price spent the rest of a week in a range between 1.3265-1.328 resistance and 1.3190-1.3210 support.

Long Trades on EUR/USD This Week

EUR/USD will probably start the week near to the very strong resistance area at 1.3265-1.3285. The resistance area was tested twice times last week and the Bulls failed to push through both times. The 1.3265-1.3285 resistance area is also backed up by strong psychological resistance at 1.3300.

eurusd analysis bullish moves
I have heard a lot of talk about traders wanting to buy EUR/USD early this week. In my opinion going long on EUR/USD before it breaks 1.3300 could be very dangerous. Resistance also means Sellers and it is going to be hard for Buyers to push through such a large grouping of sellers.

If the 1.3300 is broken watch out for the next major resistance area at 1.3355-1.3375.

Short Trades on EUR/USD This Week

Since EUR/USD will likely open below the major resistance area at 1.3265-1.3285 the Bears have a good chance of driving price down. The first hurdle for the Bears will be that very annoying minor support line at 1.3230. This line has been causing issues recently so do not be surprised if it holds back a bearish move. If the Bears manage to break through the minor support line then the next major support is at 1.3190-1.3210.

eurusd analysis short trades

If you plan to go short early in the week it might be smart to wait for price to break the 1.3190-1.3210 area. The next major support area is at 1.3120-1.3140.

Ranging on EUR/USD

As always I will be keeping a sharp eye out for ranging. Yesterday I wrote a post about range bounces and I mentioned that a good range produces a lot of reversal trades.

I probably wont be trading range bounces between the current range on EUR/USD because of the 1.3230 minor support.

eurusd analysis ranging