Britt Maras

Forex Market Update: EUR/USD Technical Trade Opportunity

Recent consolidation in a narrow range experienced a brief upward extension that faced divergence in a semi-illiquid condition Friday. The upward move was technical in nature but failed to offer effective reconfirmations of previous resistance (as new support) thus the rapid collapse seen since the Sunday open.

Immediate resistance is 3033/3057 level with a potential rejection point at or below 3113-19/23 near to the 3081-93 level. My stop loss level will be 3173 as I prefer to see 3123/49 reject if, if not below more near to the 3113-35 level, as described above.

Forex traders may consider that should new resistance form as described above -- and then new resistance in the 3093/71 (or 3113-29) level form and sustain any false pressure or with a new cap 3115/3103, then indeed new lower targets at 2967-63 and 2939 and lower offer extension downward towards 2887/69/33. A clear break of 2850 straight through to 2839 offers extension to 2778/56. Such a move may offer new resistance formed at or below 2859-77.

This bearish view can be rejected should new support form at 3054-81 better preferred at 3132/25 – 3161 but, will likely face firm rejection at 3183/97-3207: If this occurs, then we may see the bear cycle produce should the original forecast resume. Only new support at 3231 will face choppy resistance towards 3400/70 at which point extreme exhaustion is likely and then we will readdress the market structure at that stage.

If the eur/usd does not challenge and set new resistance above but instead breaks 3003-2991/86 testing 2950’s level, then loops back to form new resistance below 3003/07 (2997/87) – then the profit targets for the bear move described above will remain.

Should this forecast and trade advisory fail to perform and as long as levels listed above are validated then I may issue a new forecast if warranted.

When trading the eur/usd I never use more than a 39 pip stop loss based on stated levels and typically the levels stated offer less than a 26-31 pip stop loss. I do not dollar cost average and I do not scale into trades. Success is described and failure is clearly defined.

Should a forecast fail at all, if slightly, then resume in earnest, the same levels will apply and are likely to be honored.

Britt Maras – Senior Currency Strategist