EUR/USD bounces from 1.3200

Back from Hong Kong ! been on vacation last week, so blog was not updated. The pair made a brief dive towards the 1.3200 important support but bounce back after buyers came out to grab cheap EUROS. The economic indicator seems to suggest recovery is still on track and with Greece default abated, traders are now cautiously optimistic on the outlook. expect more short coverings here.

Greece sells more T-Bills than expected, putting a floor on the downward pressure in EUR/USD

The 4 Hourly chart shows that the bulls were able to keep the pair afloat above the support following good sales of T-Bills from Greece. A temporary floor might be in place for the pair now. So far, i'm still neutral on this pair but bullish on the prospect that EUR/USD will attempt to retest the prior high at 1.3700

Greece won 45bln Euros, easing the pressure on EUR/USD for now

The EUR/USD rallied today gapping above an important resistance line at 1.3600 following good news for Greece with the 45bln euros aid package. The pair now trades around 1.3640. I reckon the next important resistance at 1.3850 area will again be tested. Support is now seen at 1.3430 and 1.3260 area. Technically, the Bulls seem to be in charged for now. For the bulls to take total control, the resistance at 1.3850 must be taken out and the pair must not break 1.3250 area for this upward correction.

How to trade the H&S pattern on 5th April 2010

The H&S pattern which i posted earlier unfolded nicely last week. The pattern brought about 2 entries by taking H1 Outside Bars as signal candles. The 1st entry came about at the right shoulder of the H&S pattern with a nice Outside Bar pattern and the 2nd entry came about at the break of the neckline of the pattern. Both entries carries high R:R ratio if one were to be patient enough to trail their stops as each swing highs form in H1. From the graph there are a total of 4 swing highs formed before we eventually reach the bottom of the trading range. As each swing forms, stops will be tighten to the last swing high, so following this you will be moving your stops down with the trade for atleast 4 times before it gets taken out making a massive gain.

A threat to the livelihood of the bears in EUR/USD

The EUR/USD made an impressive short covering rally at this week close following good news for Greece bailout efforts. Techinically the bear trend seems to come to an early threat with the pair lingering at the walls of the bear channel. If the pair do breaks free from the channel and challenges the next 2 important resistances, the livelihood of the bears might be at stake. Important resistance to watch for :

1.3600 & 1.3850

Possible H&S formation for EUR/USD

Presently the pair is still within the Bullish correction channel as we can see from the 4 Hourly chart. Possible bearish H&S formation can be seen with potential right shoulder at 1.3575 area. if we do get a break on the bullish price channel, 1.3430 will be 1st bear's target followed by the 1.3250 prior swing low.

First time in 3 years, Finally! Good Friday indeed at least in US!

For the 1st time in 3 years, the NFP finally made it back into the positive territory giving policy makers and investors at least some reassurance that the overall economy is on the path to recovery. The dollar were firm across the board with varying intensities across the majors. With US having better data, the policy makers might be pressured to raise rates sooner than the debt stricken euro nation, hence we might see further cap in rallies for the pair for the time being. Technically, the EUR/USD is still kept well within the Bearish trend channel and a bounce off the Upper trend line is clearly seen here. If we do break below 1.3430 area, the prior low of 1.3250 will come into view very soon and to be tested again.

Bearish channel of the pair is still intact

With the pair still trading in the bearish channel, i expect a test on the recent low might materialize once we break down again from the 1.3430 level. Volume might be thin on NFP friday this week as we see banks on holiday tomorrow.