Trading strategy: short at 1.4240, stop at 1.4300 (1% risk), 1st objective at 1.4180, 2nd objective at 1.4120

Euro's sell-off continued as dollar has performed pretty well across the board, and so far it doesn't suggest that it will slow down. In case of an extended recovery, the euro may enter the 'rallies selling territory' into the 1.4240-1.4280 region, where resistance is formed by fib ratios of last down leg from 1.4410 to 1.4065. Interim resistance is seen at 1.4200 while on the downside, support starts at 1.4100, backed by 1.4050/65 and the 1.4000 mark which is a key barrier to watch in case of more euro selling. Short term sentiment is bearish and a pullback to the upside seem possible as the USD Index is currently facing resistance at 78.50 and may form a double top if it doesn't break. Current exchange rate is 1.4116 @07:13 GMT

Support: 1.4100, 1.4050/65 and 1.4000
Resistance: 1.4200, 1.4240 and 1.4280/00
Market sentiment: long term - bullish, medium term - slightly bullish, short term - bearish, intra-day - bearish

EURUSD daily chart 1-21-2010
USD index daily chart 1-21-2010


Trading strategy: stand aside

Support was found at .7200 - the median retracement of last upward swing from .6970 to .7440 after yesterday's 170 points decline, double than the 20 days average daily range. Former support at .7300 turned resistance, and may limit gains for a while in case of a recovery - triggering more selling orders. However, there's a long way until getting up there and risk of more downside action is currently high. In case of resuming yesterday's decline, next support comes at .7150 - then .7100 and the key .7000 mark, lower. Selling into potential rallies, below yesterday's open, seems the 'better' alternative for now, instead of picking bottoms. Current exchange rate is .7212 @07:13 GMT

Support: .7200, .7150, .7100 and .7000
Resistance: .7300, .7340/50 and .7400
Market sentiment: long term - bullish, medium term - bullish, short term - slightly bearish, intra-day - bearish

NZDUSD daily chart 1-21-2010

Have a great day!