Euro-US Dollar (EUR/USD) had gone as high as 1.3308 after breaking over the May 1st, 2012's resistance of 1.3283. After this break the pair could not sustain over 1.3300 and the second attempt to break over this failed at 1.3295. After 8 day's price action over 5-day EMA, ER/USD managed to break below this support and went as low as 1.3158 before closing for the week at 1.3188 i.e. almost at the 5-day EMA.

The break of May 1st resistance indicate the underlying bullish sentiments but the failure of sustaining over 1.3300 and the subsequent break of the recent support level of 5-day EMA and also the Tenkan line of daily Ichimoku cloud indicate the possibilities of further downward consolidation before we see some more upward gains.

On the upside we expect a resistance first near 1.3232 and even if this is broken then next resistance is expected below 1.3280. With these resistance holding, we would expect further consolidation towards first a minor support neat 1.3025/1.3030 and with a break of that towards the support zone of 1.3090/1.3110. This support zone is derived by 22-day EMA, which is currently near 1.3095, as well as the next support level of daily Ichimoku cloud i.e. Kijun line support at 1.3093. However on the downside any sustained break below 1.3080 and more specifically 1.3065 will neutralize the outlook for some immediate further gains. Such a break should bring further consolidation towards 1.2095 (55-day EMA) or more.

With the supports in the range of 1.3090/1.3125 holding, another break over 1.3308 should bring further gains first towards 1.3370/1.3385 resistance and any decisive break of this should take EUR/USD towards 1.3480/1.3486. This level does not only represent the resistance during later half of February 2012 but such a move will also represent the 50% retracement of the downward move during beginning of May, 2011 and July 24, 2012.

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