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EURUSD Daily Forex Analysis: Daily Swing Failure Supports More Gains

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It's nice when you go on a run of great analysis. In yesterday's post I mentioned that the pair was likely to head higher and the 1.3750 area was a likely target. This pull back is nowhere near a decent level of Fib retracements though and higher prices could be seen. The first decent Resistance comes from the 38.2% line at 1.3926. I prefer to look at 1.3855 because there was a good Bounce from that area on 1/31/10 and just below there at 1.3837 there was decent resistance on 02/09/10. That 1.3837/855 area marks my first resistance area going forward, the second is at 1.4025.

The 1.4025 mark is below the 50% Fib Retracement but marks a bounce from support on 01/21/10 and a failure at resistance on 02/03/10. The actual 50% Fib number is around 1.4052. I'll be looking for price to fall back to the down trending line over the next 24 hours. I'll then be looking to establish long positions in the 1.3800/34 area for a test of 1.3900 and possibly a move to 1.4000. The daily chart RSI(14) has moved back above 30 and in fact shows a swing failure between 02/05 and 02/12. This view supports more gains for the pair as well.

However, those that follow the blog know that I really like black candle trades. Today's price action has created a black candle and that suggests more weakness to come. This would be entirely possible if this were indeed a bottom for the move. Often price will hit a new low or high twice, creating a Double Top or bottom. My entries would be in the 1.3650 area with profit targets in the 1.3600 Range. I particularly like the 1.3600 area becasue it has been bounced away from significantly twice in the last 8 days and Friday's price action was centered around the 1.3600 mark.