The markets seem to be taking a breather ahead of a data-filled end to the week. The European Central Bank and Bank of England will both be announcing their interest rate decisions tomorrow morning as well as U.S. Non-Farm Payrolls with a tee-time at 8:30, Friday morning.

EUR/USD has settled into a 1.2550-1.2690 range just under the series of labeled Fib resistance levels after a healthy 350 point rally from the most recent consolidation zone of 1.2375-1.2250. This period of consolidation is certainly to be expected as the markets digest recent gains and ponder the next thrust from consolidation.

For today, we are looking to be long EUR/USD on a test of 1.2600. Measured move AB=CD down into a .618 retracement offers a nice long Gartley setup with stops under the .786 retracement of 1.2579. Initial targets will be the upper-end of the consolidation channel at 1.2650 at which time you can trail stops to breakeven for a possible move to 1.2690.

I took a long, hard look at the EUR/USD weekly and daily charts this morning and found a very tight, technical confluence of Elliott Wave and Fibonacci Theory that pinpoints a longer-term target of 1.2900. It's not vital that you thoroughly understand all the studies involved here, but rather take away the longer-term targets and incorporate them into your day-to-day trading. When you favor the direction of the longer-term trend in your intra-day trading, your probability of success is notably increased.

.618 Retracement of the 1.3660 all-time high to the 1.1630 low in EUR/USD produces our long-term target of 1.2889. The rest of the analysis is secondary but supports the target of 1.2900.

Todd Gordon is a Technical Currency Strategist and Fund Trader with GAIN Capital Group.

Disclaimer
The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.