Forex Technical Update
The market followed through with a break of consolidation to the downside during the 1/4/2012 US session and into the 1/5/2012 European trading session. This slide broke below the 2011 low established in Dec at about 1.2860. The next psychological support in the near-term could be at 1.28. However the decline could very likely continue after a brief corrective rally toward lower 1.26, which is seen in the weekly chart as a support pivot during August and September 2010. The 78.6% retracement of the 1.1876-1.4939 swing resides just below that pivot near 1.2530. It's not shown here but if you take the fibonacci retracement of the rally in Oct 2011, you will find extension of 150% also in this 1.2530-1.26 area. Then we can expect some more significant consolidation from these levels. If the market continues lower after that, we are looking at the 2010 low at 1.1876.
Fan Yang CMT is the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources