EUR/USD To Trade With Upward Bias This Week

Analysis - EUR/USD (last 1.2887) is likely to trade with an upward bias this week as the daily stochastic measure is bullish and the MACD line has staged a bullish crossover against its exponential moving average, while a bullish parabolic stop-and-reverse signal was hit at 1.2769 on Wednesday. Resistance is at the Aug. 18 reaction high of 1.2923, and then at 1.2959, the 50% Fibonacci correction of the decline from the Aug. 6 high of 1.3333 to the Aug. 24 low of 1.2584; a breach would expose the upside to the psychological 1.3000 level, and then to 1.3047, the 61.8% correction level. An extension of the rise would target the previous base of 1.3071 set Aug. 10, then the Aug. 11 high of 1.3190 and the Aug. 6 high of 1.3333, currently near the 200-day moving average. Support is at Thursday's low of 1.2775; a breach would temper the near-term positive outlook, exposing the downside to Tuesday's low of 1.2623. An extension of the fall would target 1.2584, and then the July 13 reaction low of 1.2520. EUR/USD may consolidate over the next few weeks below 1.3333 as the weekly chart is mixed: the weekly stochastic measure is bearish near the overbought level, but the weekly MACD indicator is still bullish. A rise above the 1.3333 resistance would reinstate the positive medium-term outlook, exposing the upside to 1.3510, the 50% Fibonacci correction of the decline from the Nov. 25 high of 1.5144 to the June 7 low of 1.1875; and then to 1.3691, the April 12 reaction high.