(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; downtrend lines in red; chart patterns in magenta; Fibonacci retracements in grey; 50-period simple moving average in light blue.)

1/19/2009 – EUR/USD – Price action on the EUR/USD (a daily chart of which is shown) has descended substantially on Monday (1/19/2009), and appears poised to continue the downtrend that has been in place for the last month. Confirmation of a downtrend continuation would occur on a significant break below the 1.3025-1.3050 zone, a key prior support/resistance region that also represents the last swing low in the downtrend. In the event of this breakdown, several different support levels reside further to the downside, on the way to the recent 2 ½ year low around 1.2330, which was reached in late October. One of these intermediate support levels resides around 1.2800, and another one around the 1.2550 area. To the upside, the steep downtrend resistance line, which represents the most recent downtrend that has been in place for the last month, should serve as strong resistance for the near-term.

James Chen
Chief Technical Strategist
FX Solutions

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