By: Doug Rosen
I will start out with this pair taking a brief look at the weekly chart. Last week price fell to the 233 ema then bounced. It seems to be heading back up, however, tough resistance does stand in its way. The weekly 21 ema is just above price as well as a descending trend line that has been previously broken. Stochastic as also popped out of the oversold zone and has crossed and is pointing up. On the daily chart price is meeting up with the 233 ema and a 144 ema just a bit further above. Price is also between the 61.8 and 50.0 fib zone from the previous move down. The stochastic is in the overbought zone and the stochastic has made a bullish cross from within the overbought zone which is very bullish. So, I think we have to watch for a couple things, a big drop or a breakout to the upside.
Price has just broken the monthly R3 at 1.3929 as well as last week's high at 1.3913 and is approaching the daily R2 at 1.3945. A break beyond the daily R2 at 1.3945 will constitute a breakout to the upside and the only thing that may stand in the way for at least 50 - 100 pips so after price breaks 1.3945 I would be watching for longs to 1.4000 and beyond.