The Euro has made a nice correction after being in over bought territory and reaching a new 2 month high last week.   The double bottom at the 1.5300 zone looks as though it could be confirmed if the Euro bulls can hang on to 1.5600 and take the pair to 1.6000 with a possible breach above that.   On the other hand, the dollar bulls should be looking to take out 1.5550 to make a move back to test 1.5300.   Consolidation still has the upper hand at the moment with the bottom at 1.5300 and the top at 1.5900.

Since both economies are in a weak state we don’t like trading this pair at the moment.   But for those that can’t stay away from it, do you still have hair?    The 8 month trendline was breached on June 26^th when the Sterling made its run to 2.0000 (strong psychological resistance and 200 day SMA).   Since it touched this level we have seen a swift move back to the congestion zone, also sitting on the top of that trendline, where anything is possible.   If 1.9650 is maintained and support is built here then 2.0000 will be threatened again with targets being around the 2.0240 zone if broken.  Support should be 1.9410 and if taken out would seriously threaten the extreme support of 1.9340, which is very important for Sterling bulls to hang on to.   

This pair should be on the mind of many traders as 108.56 looks as though it could be the top of the 4^th Elliot wave or the top of larger correction a wave.   According to the 1 day chart with the 200 day SMA, the pair looks to be building resistance.   A break above 108.56 would bring on the dollar bulls to go to 110.  Below 105.60 and even further below 105 would confirm a break out strategy that could lead to a swift drop in this pair as shown in the past.