- 4H: The bearish Gartley (retracement) scenario was mentioned in last Friday's weekly post. The market was projected to complete this pattern near 0.8850. (Refer to Weekly Technical Update 2.5.2010).
- The market rallied and stopped at 0.8840 instead. The European market got underway with an engulfing pattern, and very strong bearish candles. This spells a possible break of the upsloping trendline.
- This break can be considered a confirmation that the rally was just a pullback and re-established the previous support at 0.8850 as resistance. The downtrend is confirmed further when the stochastic dips below 50 - currently attempting.
- Daily: With the 4H price action confirming bearish outlook, the daily time-frame shows a swing projection to near the 0.84 area. The stochastic is rolling and crossing over from overbought and also signals at least short-term bearish outlook.
- Weekly: The weekly chart shows the pair in a larger bullish context. However, it has broken some important trendlines, and a larger scale swing projection aims at the 0.83 area.
Commodity Trading Advisor