While we saw some consolidation and pullback during last week’s timing resistance on EUR/USD cash and futures, once this resistance cleared the rally continued to new swing highs. Usually when timing resistance doesn’t bring a solid downside reversal there’s actually acceleration to upside and the next targets are met. The clue to look for is whether or not there’s a significant intraday breakdown during or immediately after the timing phase. In this case we didn’t see that sort of breakdown.

Now price is approaching the initial daily upside target:

Click on image to enlarge!

1.2888 was calculated by taking the high on May 21st to the low on June 7th and multiplying by a factor of 1.272. Very often the target calculated by using the swing into a reversal becomes the termination point of a corrective move. So while there’s no guarantee, this level does represent significant resistance. At and after that point, it will once again become essential to watch intraday support levels on pullbacks in order to determine whether we’re just seeing a corrective decline or the start of a more solid move to downside. These levels are updated in my daily report and in real-time in my chat room so that we can make that determination. Another factor to watch on the daily chart? If the upside pattern is to hold smoothly, on a pullback we’d want to see the 50 CCI hold above the +100 line. That’s shown at the bottom of my chart in bold red. The equivalent daily target on the CME Euro contract is 1.2902.

For more from Mark including his “Chart of the Day”, visit MJBraun.net.