Technical Market Overview:
The EUR/USD pair has bounced strongly from the 61% Fibonacci retracement on 20th December and keeps going higher. The first rally has been capped around the level of 1.1096, but after some struggle, the bulls have managed to continue to rally higher and are currently trying to hit the level of 1.1144, which is the next target for them (it is a technical resistance for the price as well). Any breakout above this level might lead to the old trendline test, but to do this the bulls would have to break through the technical resistance located at the levels of 1.1167 and 1.1179. Although the higher timeframes trend remains bearish, the global investors must take into account, that the EUR/USD might be finally breaking up from the multi-month Ending Diagonal pattern.
Weekly Pivot Points:
WR3 - 1.1242
WR2 - 1.1207
WR1 - 1.1132
Weekly Pivot - 1.1099
WS1 - 1.1021
WS2 - 1.0984
WS3 - 1.0910
Trading Recommendations:
The best strategy for current market conditions is to trade with the larger timeframe trend, which is down. All upward moves will be treated as local corrections in the downtrend. The downtrend is valid as long as it is terminated or the level of 1.1445 clearly violated. There is an Ending Diagonal price pattern visible on the larget timeframes that indicate a possible downtrend termination soon. The key short-term levels are technical support at the level of 1.1040 and the technical resistance at the level of 1.1267.
