EURUSD failed to break the strong psychological resistance of 1.3500 and fell strongly from 1.3486. The currency pair went as low as 1.3187 and closed for the week at 1.3198.
A couple of points to be observed about the recent price action:
1) The upward move could not break the psychological 1.3500 level.
2) The move took the pair a little higher than 50% retracement of the downward move from October 27, 2011 to January 13, 2012. Such retracements after such a strong downward move are quite normal.
3) The resistance also came little below the upper trend line resistance of the trend line channel.
4) The current price is little above lower trend line support of the short-term channel.
5) The current price is also trying to break the 55-day EMA support.
For the next week our outlook remains on bearish side for a move towards 1.3165/1.3160. Any decisive break below this level will represent a break of the above mentioned short-term channel and also a confirmation of break of 55-day EMA support. Please note that the current price is also slightly below the 55-day EMA level. In such case we would expect further downward move first towards 1.3135 I.e. the upper edge support of the daily Ichimoku cloud and then the psychological support of 1.3000. A break of 1.3000 should take the currency pair towards 1.2974 which was the support of February 16th and also a little above Fibonacci 61.8% retracement of the recent upward move during Jan 15th to Feb 28th. Any strong break below this will confirm that the recent upward move was just a correction. Any strong break below 1.2974 should take EUR/USD towards 1.2930 and any firm break below 1.2920 should lead the way towards 1.2840 support and possibly further down.
On the other side if the above mentioned decisive break of the short-term channel does not take place then on the upside we would expect a resistance near 1.3360. Any decisive break of that will turn our focus back towards upside first towards 1.3420 and then towards the recent 1.3486 and with a break of that towards 1.3550.
Further Readings:
2) Daily technical analysis: EUR/USD analysis.