EUR/USD Daily Update, Tue 10, January, 2012
Good morning, friends,
Well, looks like we've got something. Although it is a bit early to talk about move to 1.32, but some bullish pattern has appeared.
First, I want to remind you that theoretically market should not show any new lows in nearest days if it really intends to show retracement, because it has hit all targets in current area, there is not target lower, since there is no reason for new low.
Also market stands now in completement point of daily AB=CD and 1.618 extension of previous retracement - we've discussed it already.
Second reminding is that we need up trend and breakout of channel on daily time frame to speak about retracement.
Currently it has formed perfect piercing in the cloud pattern. But now it is not quite clear - is it due recent AB-CD or is it starting point of somethng big. Only following move will clear that. On daily time frame also imporatnt moment is that trend will hold bearish only till 1.2830.
4-hour trend is bullish. It tells that market is ready for a bit deeper move to upside. Nearest resistance area is 1.2830-1.2845 K-resistance that also includes pivot point.
Here is another important note. One thing that could point on potential deep retracement on daily time frame is if market will accelerate above pivot resistance 1 - 1.2975. THis is a bit eary to talk about it, but this is important. Keep an eye on it.
On hourly chart trend is also bullish. We see excellent upward start with "222" Buy pattern. Now market has achieved 0.618 target at 1.28 from AB-CD pattern. Completing point of this AB=CD coincides with K-area and pivot point, so, this will be rather strong resistance and market should respect it. I will not be surprise, if market will show 0.618 support after it will reach it.
That's being said, currently we have some bullish signs, but it is not clear yet - do they have long-term potential or not. That's why we will focus only on today's trading session. Probably market will hit 1.2830-1.2845 area and after that retracement to 1.2780-1.2740 is possible.