The EUR/USD pair is continuing in the scenario identified when it bounced from the support area at the 1.2990 on July 15th, 2013. This pair is now moving towards the second target of that setup. That target is at 1.3470.
Seen the typical behavior of the Euro, that likes to trade in extensions, I do not anticipate a move lower at least until the 1.3470 area has been touched. There we could see two potential scenarios, with the 1st scenario being the most probable (see below picture):
Scenario 1. If and when price gets into the 1.3470 area of second target we will almost surely see profit taking from Program Trading on the daily timeframe. This is the norm and this is also the high probability scenario.
Scenario 2. There is a small possibility for price to continue higher, but only in the context of a Dollar crash scenario. But we are not yet there (maybe).
If scenario 1 plays out as I anticipate, the profit taking that will follow is likely to bring price back into the 1.3340/50 area. There Program Trading is anticipated to resume the move higher in the Euro.
I want to remind you all that the longer term target for the Euro is in the 1.41 area. Please review last weekend s weekly review videos.
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