The FX Trader’s view – The 2009 uptrend in EUR/USD has struggled recently, coinciding with the test of a 76.4% recovery level. There seems to be something in the wind, but the bears need to produce more before we can confidently call for a pullback phase.
- WEEKLY CHART:
So far the 76.4% recovery level has provided good resistance, and s/term reaction here has been negative.
Support from around the old Dec-08 high has come under pressure. - DAILY CHART:
Breach of a s/term bull channel base provided a preliminary bear sign.
And now we wish to see a close below the 1.4623 03-Nov low for a better signal – this would also see violation of the bigger bull channel base.
But the 23.6% level at 1.4510 would warn against chasing the market down from these lower levels.
However, at that stage we would be assuming that s/term strength was temporary ahead of further bear action.
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