participation on the long side in the Euro/Dollar pair started on July 10, 2013 showed once again bulls and Program Trading defending the area of support known since the beginning of February 2013. This area starting at 1.2910 and extending down into the 1.2716 level of failure has been successfully tested now 3 times. This is very significant because it also shows that the 1.4110 target for the Euro is still in place.
The 1.2990 area of daily long entry was front-ran on Monday July 15 showing an urgency on the side of the buyers. That area of support and long entry has a 1st target around 1.3320 and a second target in the 1.35 area. If price gets to 1.35 we could see some profit taking there, bringing price back to 1.3380. But it is still early for that and we will assess this at the right time.
I see two potential scenarios at the moment (refer to below picture):
Scenario 1. price of Euro could just continue higher into the 1.35 area without pause . This is the preferred and most probable scenario [notice that scenario 1 is playing at the moment]
Scenario 2. However below 1.3070 we could see a retest of the 1.2990 area (a proper test without front-run) or even a retest of the larger 1.2910 area of support. I do not anticipate a move below 1.2716 at this stage.
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