Weekly Forex Play January 29, 2012 EUR/USD

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The EUR/USD Rebounds Jan 29, 2012

EUR/USD Current Price: 1.3224
Daily High/Lows:

Fri Jan 27 1.3227/1.3077
Thu Jan 26 1.3183/1.3089
Wed Jan 25 1.3119/1.2930
Tue Jan 24 1.3062/1.2953

Pivots: S3: 1.2926; S2: 1.3024; S1: 1.3122; P: 1.3175; R1: 1.3273; R2: 1.3325; R3: 1.3377

EUR/USD: Over the last two weeks, the EUR/USD has performed very well, in a rebound that pushed 600 pips at Friday’s close from market lows of 1.2627 made on January 16, 2012. Despite ongoing uncertainty surrounding Greece, and S&P and Fitch downgrades, this week’s EUR/USD boost was fueled by the Fed’s dovish outlook at the FOMC meeting on Wednesday. The question now is how much further can the EUR/USD climb before pulling back? The momentum closed the week strong in favor of the EUR/USD, but we are nearing some significant levels. On the topside, the 38.2% FIBO retracement from the high of 1.4245 on October 27, 2011 to the low of 1.2627 on January 16, 2012 brings us to 1.3248 followed by the 50% retracement at 1.3440. Last week we noted that 1.3076 was the key level to watch and once it broke, the EUR/USD continued to move higher. On the downside, that level remains key support, and if broken, the 1.2930 will garner support followed by 1.2880. The coming week should be fraught with volatility with several key news releases. Day trading may be in order, rather than taking a view at this time on the daily charts.

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