(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.)
5/18/2010 - EUR/USD - Price action on EUR/USD, a daily chart of which is shown, dipped below 1.2300 support on Monday (5/17/2010) before correcting back up above that level and consolidating as of early Tuesday (5/18/2010), New York session. The technical bias on EUR/USD, however, remains substantially bearish in line with the strong continuing downtrend in the pair that reached a new 4+ year low on Monday. Within the context of this strong downtrend, upside resistance continues to reside tentatively in the key 1.2500 price region. With any strong re-breakdown and daily close below 1.2300, an important technical and psychological downside support target resides in the 1.2000 price region, which also coincides with a 161.8% Fibonacci extension of the latest bearish run.
James Chen, CMTChief Technical StrategistFX Solutions
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