EURUSD consolidates above 1.0848 before flying towards 1.2220 levels !


As shown on the weekly chart posted below, Middle-term forecast for EURUSD has turned neutral, the pair is in recovery mode as long as trades above 1.0848/1.1036 support on a weekly closing basis.

EURUSD_weekly chart May 082015

Note that according to a weekly chart, the first main resistance above 1.0848/1.1036 levels comes at the 1.2220 levels. As a result; as long as 1.0848/1.1036 support holds on a weekly closing basis sudden rise towards the 1.2220 levels couldn’t be ruled out in the upcoming weeks….

To restore the downside momentum, sustained breakout below the 1.0848 levels on a weekly closing basis is needed, otherwise any fall above the 1.0848 levels will be limited…

Since we have a big gap between support and resistance levels (1.0848/1.2220)…….. Let’s shift down to daily time frame to anticipate support and resistance levels…..

EURUSD Daily Chart  May 08 2015

On the upside, we have 3 critical levels: 1.1380, 1.1553, 1.1680

1.1380 has already rejected, If the pair manages to extend gains above 1.1380 levels, I think 1.1551 might get exposed, If seen, the focus will be at the 1.1680 levels, It’s the last resistance level, a break will pave the way towards  the weekly target 1.2220/1.2570 levels…..

On the downside: we have 3 critical levels: 1.1122, 1.1065, 1.0845

Note that stability above the 1.1065/1.1122 levels on a daily closing basis could mean a return to the 1.1380 levels, so we need to keep an eye on both levels, however; If 1.1122/1.1065 fails, focus will be on the last support level 1.0845…

According to the daily chart, 1.0845 is the last support level and the most critical, It protects rise from 1.0461 levels. As a result: AS long as 1.0845 support holds on a daily closing basis, a higher leg above the 1.1380 levels is likely…

Conclusion: we have strong demand zone around 1.0845 levels, If the pair manage to correct lower toward this level, I think that would be a great opportunity to buy the pair around this level…