EUR/USD (daily chart) as of November 8, 2012 has furthered its descent from the major 1.3000 psychological level, the 200-day moving average, and the key 1.2800 prior support level, after having broken down below a 3-month bullish trend line in late October. This occurs within the context of a longer-term bearish trend that has been in place since the May 2011 1.4935 high. The recent bearish stance that has been seen since mid-October has a potential short-term support objective around the 1.2600 level, especially after having broken down below the important 1.2800 level and the 200-day moving average. This 1.2600 level also coincides with the 50% Fibonacci retracement of the bullish correction from the July 1.2040 low to the September 1.3170 high. Further to the downside, on any breakdown below 1.2600, another major support level potentially resides around the 1.2300 price region.

 


James Chen, CMT
Chief Technical Strategist
FX Solutions

 

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