(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)
4/06/2010 - EUR/USD - Price action on EUR/USD, a daily chart of which is shown, has once again tentatively broken down below a countertrend bullish retracement and the key 1.3400 support/resistance level in its bid potentially to continue the strong downtrend that has been in place since the early December high. Since that high, this currency pair has been characterized by short-term bullish retracements and consolidations followed by substantial breakdowns in the direction of the overall downtrend. The most recent breakdown occurred just today (4/06/2010) as a steep short-term parallel channel that reached a high near 1.3600 has been broken strongly to the downside. With continued bearish momentum off this channel breakdown and the tentative breach of the key 1.3400 level, the next downside support target resides around the 1.3266 level, which represents the 10-month low hit in late March. A further breakdown below that level would confirm an overall downtrend continuation and potentially target further downside support in the 1.3100 price region.
James Chen, CMT
Chief Technical Strategist
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