(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; 50-period simple moving average in light blue.)
8/19/2009 € EUR/USD € Price action on EUR/USD, a 4-hour chart of which is shown, is currently in consolidation near the bottom of a parallel uptrend channel that has been in place since early June. This parallel uptrend channel exists within the context of a much larger parallel uptrend channel that has been in place almost since the beginning of the year. In the current smaller channel, two dynamic support/resistance areas are of key significance. First, in the event of a substantial breakdown below the bottom of the smaller channel, the immediate further downside support target resides around the bottom of the larger channel. Second, a strong breakout above the bearish counter-trend resistance line within the context of the smaller channel could target further major resistance at or near the top of the smaller channel.
James Chen, CMT
Chief Technical Strategist
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