The EURUSD tripped the next target at the 1.25409 (high from yesterday) after holding above the old trend line on the hourly chart. The price has also moved above the next target at 1.2554 which is the 50% of the move down from the May 21 high).
To keep the rally going, look for the next step progression:
- 1.2573 (high from May 29th),
- 1.2623 (KEY LEVEL. This equals low from January 2012 and high from May 28th) and
- 1.26667 (38.2 of the move down from May 1). Those are the steps right now.
Where is risk on the downside now?
The 1.2554 is a level to get through and stay through. Traders worried about the strength of the upside subsiding could use this level/area to take profits. More conservative stops below would be at the 1.2524-34 area. The last leg higher has the 38.2%-50% correction zone at this areas (see yellow area in the 5 minute chart below). Stay above this level and a move higher can be expected. Move below and a further correction from disappointment should materialize.
