Last week has been one of the most critical weeks for the pair, we’ve witnessed 2 important and critical events :
1- The first event, the pair has closed on monthly above 1.3242 levels, May 2013 high, this scenario is likely to bring strong bullish momentum in medium/long term view towards 1.3710 levels.
2- The second event, the pair has broken above the key resistance 1.3255 – 21 Jun 2013 high – on the daily chart , note that this level protects the key resistance 1.3415, stability above 1.3255 on daily closing is likely to have large bullish implication towards/ beyond the 1.3415 levels, sudden rise might be seen towards/beyond 1.3415 levels, the next resistance is 1.3485 which I think is the most important resistance in medium-term outlook.
On the downside, support is at 1.3255 levels, a break below this level may expose 1.3165 levels, but downside below 1.3165 should be contained well above 1.2922/1.3058 levels, so buying the pair after rejection on daily from 1.2922 / 1.3058 levels is strongly suggested with target towards 1.3500 levels, however ; Losing 1.2922 will flip bias back to the downside for retesting 1.2755 levels .
Support and resistance levels: 1.2755, 1.2922 (main) , 1.2992 , 1.3058 (main) , 1.3165 , 1.3255 (main) , 1.3415, 1.3485, 1.3615, 1.3710.
In all as long as 1.2922/1.3058 levels hold on a daily closing basis the pair will remain strongly biased to the upside towards 1.3400/700 levels, losing 1.2922 will dampen my bullish view and turn the focus back to 1.2755 support instead.
In the long term picture , fall from 1.6035 , 2008 high , is treated as a consolidation pattern , and fall from 1.4940 levels 2011 high is treated as a third leg of this consolidation , looks like the pair has completed 5 waves from 1.6035 levels 2008 high towards 1.2042 2012 low, momentum indicators show that the bearish momentum almost is gone, neckline is at 1.3485 levels, note that we had false break above this level last Jan 2013, so this level is the most important level, break of the triangle followed by break of 1.3485 on the weekly chart will have large bullish implication towards the 1.4250 levels ahead of the 1.5000 levels.
On the downside, support is 1.2661, stability below this level on a weekly closing basis would weaken or delay the bullish move for retesting 1.2400 levels ahead of 1.2000 levels, below 1.2000 would suggest that fall from 1.4940 is resuming towards 1.1600 ahead of 1.1100 levels.