EURUSD: As a rally saw the pair wiping out almost all of its previous week losses, risk of a return above the 1.4248/79 zone is now building up. If this occurs, EUR will resume its long term uptrend and open the door for a move higher towards the 1.4411 level with a break targeting the 1.4576 level, its Jan 2010 high and then the 1.4902 level.
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Its weekly RSI remains bullish and pointing higher supporting this view. Alternatively, support starts at the 1.4061 level, its April 01’2011 low with a breach aiming at the 1.4020 level, its Mar 28’2011 low. The latter is expected to halt weakness if seen but if that snaps, further declines should follow towards the 1.3970 level and subsequently the 1.3852 level, its Mar 15’2011 low.
All in all, EUR is now set to strengthen further on the back of its past week strong rally.