(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; downtrend lines in red; horizontal support/resistance levels in yellow; Fibonacci retracement levels in grey; 50-period simple moving average in light blue.)
2/25/2008 â€“ EUR/USD â€“ In analyzing daily price movement for the key EUR/USD pair, it is always helpful to step back and take a good look at the broader picture. In this case, we can see some interesting developments on the EUR/USD weekly chart, as shown. On this weekly chart, we see that long-term price action for the pair has been characterized by accelerating uptrends interspersed with retracements back to the relevant uptrend support lines. The accelerating uptrends are represented by the three progressively steeper green lines going back at least to early 2003. The short retracements back down to the uptrend support lines are represented on the chart by the short red downtrend lines. Notwithstanding the recent horizontal range and triple top, this weekly chart is displaying some classic signs that long-term price momentum continues to be to the upside. This includes the fact that price is continuing to retrace to and bounce up off the current uptrend support line. Also, the recent horizontal trading range (represented by the two parallel yellow lines) represents almost a precise 38.2% retracement from the high (when the low-to-high Fibonacci retracement span is measured from the last retracement low in August 2007 to the all-time high reached in November 2007). Traders are therefore eagerly awaiting a break above the all-time high of around 1.4960, which should provide a solid potential breakout trading opportunity.
Chief Technical Analyst
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