(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; downtrend line in red; uptrend line in green; horizontal support/resistance lines in yellow; 200-period simple moving average in light blue.)
6/30/2008 – EUR/USD – After the impressive rally that occurred during the latter part of last week, price on the EUR/USD 4-hour chart, as shown, has just bumped up against and bounced down off of a significant resistance zone in the 1.5820-1.5840 region (represented on the chart by the top yellow line). This bounce off resistance occurs within the context of a trading range consolidation that has prevailed in this pair for almost four months now. Lending strength to a possible downturn and impending bearish bias at or near this horizontal resistance are oscillators like the displayed Stochastics, which are emerging unmistakably down from extremely overbought. In the event of continued momentum down, major support to the downside resides in the region of the last significant horizontal support level, around 1.5460 (represented on the chart by the second yellow line).
Chief Technical Analyst
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