(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; horizontal support/resistance lines in yellow; Fibonacci retracements in grey; 50-period simple moving average in light blue.)
3/10/2008 â€“ EUR/USD â€“ Are we finally approaching an exhaustion, or at least a temporary respite, in the most recent dollar plummet? As of this writing, most dollar-based currency pair charts seem to be hinting at this. The key EUR/USD daily chart, as shown, is no different. After a spectacular, record-breaking breakout on 2/26-2/27 of the previous triple-top high, price action appears to have slowed and settled into an arc with a weakened trajectory. This may be hinting at a possible loss in upward momentum. And as on other major dollar pairs, oscillators like the displayed Stochastics are way in overbought/oversold territory (overbought in this case) and starting to point back towards the opposite side of the spectrum. If an impending correction/retracement down indeed occurs, as might soon be expected, major support to the downside very clearly resides in the region of the previously broken resistance (around 1.4960-1.5000). This new support level also coincides with a key 50% Fibonacci retracement level (the low-to-high retracement span being measured from the last swing low on 2/7/2008 to the current all-time high in the pair reached on 3/7/2008).
Chief Technical Analyst
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