Mon, 02 Aug 2010 16:20:00 +0200

Forex: EUR/USD expected to rally to 1.3500/1.3700 over the summer - Mizuho

FXstreet.com (Barcelona) - The Euro has rallied from 1.1890 low in June, to reach 3-month high at 1.3150 so far today, breaking above the 32.8% Fib retracement of the November-May decline, and, according to Nicole Elliott, senior technical analyst at Mizuho corporate Bank expects the pair to reach 1.3500/1.3700 over the summer.

July's rally could be seen as the offset of May's drop, says Nicole Elliott: "After June’s ‘doji’ around 1.2140, the mid-point between it’s all-time low at 0.8228 and high at 1.6040, July’s rally can be seen as a sort of ‘pincer’ movement to May’s big drop."

Once above 1.3125, 38.2% Fib retracement of the November-May decline, Elliott foresees the Euro rallying towards 1.3500/1.3700 over the summer: "The Euro has already retraced 38% of the decline of the last seven months, adding weight to our view that the move lower was overdone and some sort of massive ‘extension’. Over the summer we expect it to rally to 1.3500/1.3700, undoing yet more of the massive correction lower that started in 2008."

Technical Analysis (2010-08-02 14:00 GMT)
EUR/USD 1.3154/1.3156 - O: 1.2995 H: 1.2998 L: 1.2987 C: 1.2994
Trend	R3: 1.3145
	R2: 1.3112
	R1: 1.3080
	S1: 1.3003
	S2: 1.3036
	S3: 1.3068