The FX Specialist view – Late last year a negative signal in EUR/USD was given, but the 2011 recovery has unsettled the bears. However, key resistance has now been tested, with an initial negative reaction. Could this be the turning point?
- WEEKLY CHART
After last year’s 3-wave, corrective structure on the upside we have been viewing subsequent rallies as corrective/temporary too.
This view would however be negated on a recovery through the 1.4281 Nov-10 high, falling resistance line and 1.4373 76.4% recovery level. - DAILY CHART:
Recent recovery here has seen a test/erosion of a 76.4% retracement, with the old rising support/return line also offering resistance.
Initial reaction has been negative, and also note the negative RSI divergence now, indicating current bull fatigue.
The first confirmation of momentum loss would come from a break of the s/term channel base around 1.3600. The next bear signal would be a breach of earlier support from around the 1.3433 04-Jan high.
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