EUR/USD Weekly Analysis (Wk Strt 18th March 2012)

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EUR/USD ended last week with a very surprising bullish move. The pair looked as if it had found the resistance area at 1.3120 too tough to cross. However, in the last few candles of the week Buyers rushed in to the market and pushed the price up to the next resistance area at 1.3185.

*All charts show in this post are 4hr EUR/USD charts.
EUR/USD Forex Analysis Resistance Level

This week is set to be a very interesting week for EUR/USD. The pair is currently stuck between two strong areas of Support and Resistance as you can see below.

EUR/USD Forex Analysis Support and Resistance

In the image above we can clearly see the strong Bullish candle (marked with the red cross) stopped dead in it’s tracks at 1.3185. This tells us that next week the 1.3185 may act as a very strong Resistance area. I would advise that you do not take any long trades until EUR/USD is able the clear the 1.3185.

Resistance equals Sellers, so buying EUR/USD before it clears the 1.3185 will mean you are buying into a large group of Sellers. It is never a smart idea to buy when everyone else is selling, so keep that in mind.

EUR/USD Forex Analysis Major Resistance Level

As you can see in the image above the 1.3185 area has acted as both Support and Resistance in the past few weeks. The 1.3185 is a strong area and it could potentially hold the Bulls back for a while.

On the short side EUR/USD has the 1.3100 Support area to contend with. The good news is the area was broken very recently by the large Bullish candle so it may have lost some of its power. Regardless, I would be very wary of going short too close to the 1.3100. As above, Support equals Buyers and selling into a group of Buyers is never a good idea.

If EUR/USD manages to break out in a Bullish direction early Sunday evening the next significant Resistance it will meet is at 1.3265. If EUR/USD does not break out it could get trapped in a range between the 1.3185 Resistance area and the 1.3100 support area.

EUR/USD Forex Analysis Ranging

If EUR/USD does get trapped in a range between the Support and Resistance areas you should keep an eye out for reversal trades. There will likely be some great reversal opportunities as the price bounces within the range.

I have no Bullish or Bearish bias for the coming week. The Bulls have clearly shown us they mean business but I am not counting the Bears out. I am just going to keep a close eye on my levels and make some pips.

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