Last week the EUR/USD fell as low as 1.2882 before finding support at this level and testing the lower edge of an ascending channel the pair has been trading along since July. Friday the pair printed a Bullish Pin Bar at the key support level of 1.2900, possibly suggesting that it will push higher against the USD soon. If the high from Friday is breached at 1.2956, there is a solid possibility that the pair will remain in the ascending channel and head to the September highs around 1.3160 +/-. This is also the top of the channel so it makes perfect sense that the pair will also find resistance at this level. However, the break of the 1.2800 area will probably bring on further bearish action with support being strongest at 1.2763, 1.2625 and 1.2514. Be mindful of a fake out break out however...breaking below 1.2900 will not be confirmation enough...wait for 1.2800 to fail to confirm the bears have taken over. For the bulls, resistance is strongest at 1.2968, 1.3050 & 1.6170. Although prices are falling prior to the lunch hour in Asia, a reversal is highly likely once London trading picks up.
Happy Trading!