EURUSD – The pair is consolidation following the sharp December rally and the test of resistance at 1.3284, the May high. We expect this correction phase to end soon as bullish trend indicators are in place with a closing cross higher in momentum tools required to confirm resumption of strength. As long as support at 1.3143, the 38% retracement of the December rally holds, the risk is for a break above 1.3386, the March high to extend the strength to 1.3493, the 50% retracement of the May 2011 to July 2012 bear trade. The 2 longs are maintained that were established at 1.3164 and 1.2955, targeting 1.3490, with stops placed at 1.3120.
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UBS Investment Bank