(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance level in yellow; uptrend lines in green; downtrend lines in red; Fibonacci retracements in grey; 50-period simple moving average in light blue.)
1/30/2009 – EUR/USD – After showing hints of a possible recovery on the heels of plunging almost 2000 pips in just over a month, EUR/USD (a daily chart of which is shown) has once again fallen dramatically within the past several days. This occurs after the pair hit a double-test swing high around 1.3330. Currently languishing right above a key uptrend support line extending from the 1.2330 long-term low, any substantial breakdown and close below this dynamic support line should target further support in the 1.2550 region, the last major swing low, on its way potentially to extreme support around the noted 1.2330 long-term low. Any pronounced bounce off the current uptrend support line next week should target intermediate resistance once again in the 1.3300 support/resistance region. The current technical directional bias appears bearish after the news and price action of this week, so any strong break below the uptrend support line should be considered a significant event.
James Chen, CMT
Chief Technical Strategist
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