EUR/USD forecast for the week of December 31, 2012, Technical Analysis

The EUR/USD pair attempted to rally during the previous week, as we continue to bang around below the 1.33 level and above the 1.3150 handle. Looking at this chart, this is the second shooting star shaped candle in a row, and this does suggest that perhaps the Euro is struggling at this point in time. We are not ready to start selling no, as we see the 1.3150 level as being far too supportive in order to do so.

If we did manage to break down below the 1.31 handle on a daily close however, we would be much more comfortable selling. On the other hand, if we managed to get a daily close above the 1.33 resistance level, we would be willing to start buying at that point time. Until then, this is a sideways market.