EUR/USD Analysis – Week Starting July 22 2012

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Hey guys,

I took a bit of an impromptu holiday for the last two weeks so I haven’t posed my analysis.

My trading for the last two weeks has been minimal but I am back to full time trading this week so here is my analysis.

EUR/USD 4hr Chart Analysis

Long Moves on EUR/USD This Week

Above last weeks close we have the 1.2200 psychological level. It acted as support last week so it may work as resistance this week.

Above the 1.2200 is the 1.2280-1.2310 resistance area. This is resistance area held well against a massive bullish onslaught last week. If the Bulls manage to push back up to the 1.2280-1.2310 I will expect heavy resistance and I will be looking to enter short reversal trades.

Above the 1.2280-1.2310 is the 1.2385-1.2415 resistance area. This area has held well in the past and if price reaches it this week I will be looking to enter short reversal trades.

eur-usd long trades

Short Moves on EUR/USD This Week

EUR/USD closed on top of the 1.2130-1.2160 support area last week. If price opens above this area it should still act as strong support.

The 1.2130-1.2160 area may hold sellers back at the start of the week so I would not take a short trade until the area is cleared.

Below the 1.2130-1.2160 is the 1.2100 psychological level. Like any psycholgical level this may act as support this week. The 1.2100 has not been hit for several years so it is hard to predict what price will do if it reaches it.

Below the 1.2100 we have the 1.2010-1.2040 support area. This area acted as strong support all the way back in 2006. Since this area has not been hit for several years it is hard to say how price will react. However, the 1.2010-1.2040 is once of the few clearly define support areas below 1.2100 so I would guess that it will provide strong support. I will be looking to trade long reversals from this area.

eur-usd short trades

Summary

EUR/USD has been in a downtrend for weeks but could this be the end of it? In 2010 the 1.2130-1.2160 area acted as very strong support and was able to hold a the Bears back several times.

The 1.2130-1.2160 will be a defining point for EUR/USD. If this area is broken it would suggest that the Bears are determined and that price will probably hit 1.2000.

There is definitely a lot of resistance above last weeks close. The Bulls spent all of last week pushing against the 1.2280-1.2310 to no avail.

At the moment price is stuck between support at 1.2130-1.2160 and resistance at 1.2280-1.2310. Which even of these is broken first will probably decide the trend for the rest of the coming week….. and possibly weeks.