EURUSD (week: 20-24 Feb. 2006)

This week, we expect EURUSD to embark on a retracement wave up, breaking through the 1.20 resistance area and reaching higher towards 1.2080 and 1.2150 later. Support starts at 1.1900, backed by 1.1855. Last week EUR finished higher against the dollar after 3 consecutive negative weeks, and the pair closed above 1.19 on the daily and hourly studies, which affects the negative momentum on these charts. We saw price closing above upper BB on 1h charts on Friday, also at 1.1895 a break of the channel line started on February 15 at 1.1955, all of which point towards further EUR gains during the next days. Also, we should not forget that the dollar rally is not over yet and prices will probably fall below 1.1800 until mid-march, however we do not expect this move to be in focus yet.

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