26 Jul 2013
EUR/USD, 1.3415 bulls last station? Sell above - Patter Traders
FXstreet.com (Barcelona) - The impressive bull run by EUR/USD continues its course, with bids off 1.3170 support on Thursday snapping the rate back up just shy of 1.33 - fresh 5-week high - and printing a sizeable bullish engulfing daily bar in the process.
While Jonathan Eliasof, Founder at Pattern Traders, is patiently waiting to sell at more expensive prices, the latest price action no longer causes the Trader doubts that a test of $ 1.34/1.35 may loom near, before sellers can take back control over what he still defines as "longer term downtrend."
The, so far, marginal break of the 78.6% fib and May pivot high just under 1.33, and subsequent close above this level, triggered by Fedwatcher Hilsenrath dovish rhetoric on its latest WSJ article, is in line with Eliasof's ideal scenario, after noting the break higher in the pair should come "induced by some sort of negative dollar catalyst". the latest upside resolution in the EUR/USD has happened to be an affair of convergences from a technical and fundametal standpoint, making the case for further upside more optimistic.
As technicals stand, Eliasof sees now a potential test of $1.3350, "a level which coincides with the 61.8% fib and descending trendline resistance" the Trader said, adding that "if this scenario plays out, the odds may increase that EUR/USD ultimately makes a run at 1.3415."
However, Eliasof's perception about the EUR/USD gets more pessimistic on an approach towards 1.35, saying that "a break of 1.3415 has the potential to lure in late-to-the-game bulls, in turn helping to carve out an important top ahead ahead of 1.35."
The shift to become a bear above 1.3415 and fake those bulls coming late to the party has its basis on, as Eliasof notes, "a confluence of technical levels, including the 50%/78.6% fib cluster, 2012 high and rising trendline resistance." Eliasof is worried that the rapid rally developed by the Euro raises the notion of bulls potentially running out of steam.
In a final note, Eliasof concludes by saying: "All we need now is some sort of bearish catalyst, one that might be driven by stronger jobs data or a less "less dovish" Fed. EUR/USD looks poised to consolidate throughout the remainder of the year as participants weigh better data out of Europe (and subsequent reluctance to unveil new monetary measures) against a backdrop of a cautious Fed, who is still likely to taper before year-end; a juxtaposition of policy that ultimately favors a stronger U.S. dollar, especially around these levels."
While Jonathan Eliasof, Founder at Pattern Traders, is patiently waiting to sell at more expensive prices, the latest price action no longer causes the Trader doubts that a test of $ 1.34/1.35 may loom near, before sellers can take back control over what he still defines as "longer term downtrend."
The, so far, marginal break of the 78.6% fib and May pivot high just under 1.33, and subsequent close above this level, triggered by Fedwatcher Hilsenrath dovish rhetoric on its latest WSJ article, is in line with Eliasof's ideal scenario, after noting the break higher in the pair should come "induced by some sort of negative dollar catalyst". the latest upside resolution in the EUR/USD has happened to be an affair of convergences from a technical and fundametal standpoint, making the case for further upside more optimistic.
As technicals stand, Eliasof sees now a potential test of $1.3350, "a level which coincides with the 61.8% fib and descending trendline resistance" the Trader said, adding that "if this scenario plays out, the odds may increase that EUR/USD ultimately makes a run at 1.3415."
However, Eliasof's perception about the EUR/USD gets more pessimistic on an approach towards 1.35, saying that "a break of 1.3415 has the potential to lure in late-to-the-game bulls, in turn helping to carve out an important top ahead ahead of 1.35."
The shift to become a bear above 1.3415 and fake those bulls coming late to the party has its basis on, as Eliasof notes, "a confluence of technical levels, including the 50%/78.6% fib cluster, 2012 high and rising trendline resistance." Eliasof is worried that the rapid rally developed by the Euro raises the notion of bulls potentially running out of steam.
In a final note, Eliasof concludes by saying: "All we need now is some sort of bearish catalyst, one that might be driven by stronger jobs data or a less "less dovish" Fed. EUR/USD looks poised to consolidate throughout the remainder of the year as participants weigh better data out of Europe (and subsequent reluctance to unveil new monetary measures) against a backdrop of a cautious Fed, who is still likely to taper before year-end; a juxtaposition of policy that ultimately favors a stronger U.S. dollar, especially around these levels."