Last week we finally saw the EUR break, close and hold above the strong technical and psychological level of 1.40. Our earlier analysis indicated that any break above this level would lead to a move to much higher areas; after Thursdays close above the 1.40 level we on Friday saw a large move pushing the market higher. The pair managed to close above the next level of resistance which was formed by October 2010 highs. November highs of 1.4280 are the next resistance area the market must break in order to continue this Bull Run.
After a sustained period of resistance, 1.40 now sits as support and any pull backs towards this area could be seen as potential opportunities to go long. With such a bullish end to last week its very possible of a pull back towards support areas early in the coming week.
The weekly charts are showing a potential succession of higher lows and higher highs suggesting the market will continue its uptrend started mid 2010. A break above the last higher high in the pattern below will suggest we’re continuing with the uptrend. We would then need to see a pull back lower forming a higher low followed by another push up before we can fully confirm the direction of this market on the weekly time frame.