Last week I wrote about important levels on the EUR/USD. Not so much about the direction it would go but what the likely targets or outcomes could be if we hit certain levels. Let’s examine what is happening now.

There are two very important levels now on this pair. The recent high at 1.6018 and the recent low just following the high dropping to 1.5282. We are still stuck in the range between those two levels and it is likely we will spend yet another week in that range. Let’s examine this further.

The current triangle scenario is still alive and the way we ended last week may be how we continue through the coming week. So a move up is most likely.

The current target then, is the top of the triangle. If we break though there then the next target will be the record high at 1.6018. I would view any move above that level as limited and that the risk would then change to the downside for a larger correction.

Remember I always try to focus on where the best places are to take risk. Frankly being in the middle of the range is not really the place (At least not for swing trading) However if you really feel you need to trade this than the current risk (for stop) is likely best placed at Friday’s opening price. If you’re momentum or day trading I would expect the best break-out opportunities for now would be to the upside.

Currently for swing trading, I’m on the sidelines until we re-visit either 1.6018 or 1.5282. Waiting for a break or turn at either one of these levels is definitely going to be where reward outstrips risk by a large margin.

Summary and technical levels to watch:

Middle of range - Not a great risk reward for swing trading

Top of triangle trend-line

1.6018 for failure or break and reversal

1.5283 for a break below

These levels will all come into play over the next few days or weeks. Mark them well on your charts as they will continue to be important throughout the next 3 to 24 weeks or more.

What of the GBP/USD?

Ah… now here we are poised to break-out of a range or turn hard around. The current descending trend-line has contained the price action for over 6 months. So this level is very important.

Technically speaking the two levels to watch here are:

The top descending trend-line current price at: 1.9761

And the bottom barrier at 1.9400

Join me on Sunday night at 6:15PDT in our OTR (Online Training Room) this Sunday night for a detailed live interactive review of these two currency pairs

Until then, good trading,

Pierre