I have reviewed the high-level plan for the Euro-Dollar FX currency futures for the Mid-Week update of this week which I typically share only with my newsletter subscribers. Only for today I am sharing the plan on the blog, as well.
ast week the Euro kept moving lower into the all the way half way back at 1.2910 (on new March 2013 contract, it was 1.2900 on the December 2012 contract) that held and we saw higher prices since the beginning of the week.
The Euro now needs to keep moving in extensions higher otherwise there is a risk of a retracement back to the 1.3000 area. Thus the two scenarios I can see are the following (please refer to the below picture ).
Scenario 1: price keeps moving in extensions and never falls below the 1.3058 level. In this case we could see the 1.3250 target area hit by the end of the week.
Scenario 2: price falls below 1.3058 and moves into the 1.3000 support area and then resumes the move higher into 1.3250 and then 1.3440. If price trades into the all the way back to 1.3000 we will need to watch the 1.2970 level. Below it the 1.2910 support area could be retested for the second time (a dangerous test).
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