The pair has pulled back sharply after breaking 1.2720, and found support at its prior declining trendline, at 1.2635. Good bounce after that keep the bullish bias intact and there is scope for further upside beyond 1.2735 before closing.

This mornings long was taken out by the pullback at entry level, but given the bounce I reestablished it at 1.2682. Stop below hourly support at 1.2620. Target is 1.3240.

Looks like we might be getting our Friday rally after all. The pair just broke key resistance at 1.2720 which is also the upper declining channel line on the hourlies, but couldn’t close above it (on an hourly basis). Still, I expect further upside since momentum is very strong. I tightened my stop to entry level (1.2650).

Support: 1.2685 HSpptRsst   1.2603 HSppt   1.2557 L-2-20

Resistance: 1.2720 Fibo38    1.2771 Fibo50   1.2822 Fibo62

RSI: Hrly: Bounced off support at 30, bullish, Dly: capped by declining TL but near 50

Hourly Chart:

Don’t want to give up the long side just yet. Long again on 1.2650 since the upmove currently is gaining traction and broke the declining hourly trendline. RSI near oversold and close to strong support at 30, which is supporting the trade. Stop tight at 1.2615 since any break below the declining trendline would call for a retest of 1.26. Target is 1.3240.

My second long survived the night but I’m exiting it at entry level 1.2642 as downside persists. Key support has been broken after all and calls for a move towards at least 1.2557.

My original long entry was stopped out at 1.2635, but I re-entered at 1.2642 on the first sign of a bounce. Even though key Fibo support is slightly broken, the last move down makes the charts look quite complete and poised for an upmove. I set my stop for the new long at 1.2590, target 1.3240.

Downward momentum is slowing and the pair is nearing a key support point at 1.2670 where the rising and declining hourly trendlines intersect. The 21.4% Fibo retracement at 1.2647 is just below, providing good support. A break below 1.2640 would call for further downside with 1.2557 as the next support level.

Hourlies are oversold however, and a bounce is due. Note the similarity with price action on 2/5/09. If the similarity holds, we should see a sizable bounce starting just around midnight PST, at the beginning of the European session. This may be followed by a typical Euro-bullish Friday. So there’s a good chance of a strong bullish move over the next 16 hours. And at 5:30PST we’ll get the US GDP report which could be potentially very bearish for the dollar if another large contraction is reported.

I’ve placed an entry order at 1.2675 to catch a drop towards those key support levels. Stop is set at 1.2635. Target is 1.3240 If my entry order is not hit tonight, I will remove it and stay sidelined overnight.

The base on the hourlies does not look convincing and complete yet, and I expect one more push towards the downside before we may see a major upmove. In the short term, the pair looks like it’s going to test the trendline junction that occurs right around key fibo resistance at 1.2825, and if we see a failure to break it, a return to the 1.2685 or slightly lower is likely. I plan on going short on a failure at 1.2825, but want to see confirmation first. RSI is sill capped by the declining trend line, and a clear break has not occured yet. If playing it safe, wait for a triangle breakout (now 1.2650-12830).

Hourly Chart:

The downward pressure persists and I exited my long at entry level on the recent bounce. I expect more downside in Euopean trading, but a bad durable goods report tomorrow morning could cause another bounce. Prefer to be out of the market until then.

My long entry order at 1.2725 was just hit and took me long with a target of 1.2815 and stop at 1.2635.

Downward momentum is slowing and I’m expecting sideways trading for the next few hours followed by a push towards 1.2770 followed by 1.2825. The pair broke out of a rising triangle formation, and the lower line of the previous triangle as well as the declining RSI trendline should limit the next up move. More upside can be expected should the pair break above 1.2825..50.

I plan on going long if 1.2690 holds and momentum turns up again. There’s risk of a move towards 1.2650 though since the pair is moving within a new triangle, and its lower line is formed by the lows of 2/18 and 2/20. Would prefer to buy a bounce off 1.2650.

Support: 1.2690 HSppt   1.2647 Fibo21, rising TL    1.2557 L-2-20

Resistance: 1.2771 Fibo50   1.2825 Fibo68, declining TL    1.2896 Fibo79, HRsst

RSI: bounced off support at 30, turning up, Dly: capped by resistance at 50

Hourly Chart: