Short term charts for the EUR/USD continue to do little and remain trading in a consolidation phase. The medium term charts are now looking a little different. When the market has quite a large move, in this case down, it often pauses for breath, not unlike a marathon runner. This upward small correction, off 1.2859, has eased the severe oversold conditions on the daily charts.
Still, we are not at neutral levels and continue to point higher, but the market has not actually traded higher to ease this scenario except by a relatively small amount. With this in mind, I am now looking for a resumption of the downward move and not looking for a move to 1.3060. I think that if we were going to correct to these higher levels we would have done so by now.
Obviously, with markets nothing can be ruled out, but staying below 1.2980 has made me change my mind a little and only if we break 1.2990 would I think we had a chance of trading higher. So if we see 1.2960/80 once more we should sell. Set stops above 1.3010, though 1.2860/45 is more the likely target. Cover shorts to there and look to re-sell a break of 1.2845 as a loss of this support leaves 1.2782 to 1.2745 then as your targeted area.
