Weekly Forex Play April 29, 2012

EURUSD-Apr-29-2012-392x239

EUR/USD Weekly Close: 1.3249
Daily High/Lows:

Fri Apr 27 1.3269/1.3156
Thu Apr 26 1.3262/1.3197
Wed Apr 25 1.3235/1.3173
Tue Apr 24 1.3217/1.3174

Pivots: S3: 1.3044; S2: 1.3112; S1: 1.3180; P: 1.3225; R1: 1.3293; R2: 1.3337; R3: 1.3381

EUR/USD: Last week the dollar came under selling pressure, especially against USD/JPY and GBP/USD. While the EUR/USD also strengthened against the USD, the EUR actually weakened against the GPB and the JPY. This week we will focus on the EUR/USD as we are approaching some key resistance levels. First, the head and shoulders pattern with the neckline at 1.3000 is still key. A break of the neckline will cause an extended move lower for the EUR/USD. The current (2) top appears to be the second right shoulder of this pattern. Second, two trend lines have been drawn and the EUR/USD is up against both trend lines. A sustained move above 1.3300 will cause a reevaluation of the view that the EUR/USD is currently close to a turning point. Third, the Stochastics is also at a turning point and since the EUR/USD has been trading sideways since February, the Stochastics has been a good indicator for reversals at ends of swing moves during this “consolidation period”. The key US releases this week include the ISM Manufacturing report on Tuesday, and the USD Change in Non-farm Payrolls and Unemployment Rate on Friday. The Key European releases this week include the Euro-Zone Producer Price Index and the European Central Bank Rate Decision on Thursday. If these releases show a combined slowdown in the US and Europe, we may be looking at a top for the EUR/USD near current levels. If you are interested in finding out what kind of trader you are, please complete the Trader’s Scorecard at www.fxtradersedge.com and receive your results immediately!

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