Forex Technical Update July 2, 2010 EUR/USD Testing Important Resistance
- Daily: The EUR/USD pair was on the verge of continuing a decline but the 1.2150 proved to be support again. That was expected, but the rally from there is a new clue that the consolidation/correction is to extend.
- This also opens the possibility of a reversal. The 1.2150 low established after yesterday's candle, is higher than the 1.1880 low earlier this month.
- The market is about to test the 1.26 resistance. This is an important one as it is the neckline of a reverse head and shoulder that is forming.
- A break above suggests the market can rally towards 1.31 powerline (resistance), or the 1.30 (61.8% retracement) level.
- The scenario above is a Gartley (AB=CD retracement pattern), suggesting even if the market breaks 1.26, we may see some resistance below 1.28 (50% retracement area).
- Therefore, I will be stalking the rally to see if, first of all, the current resistance holds at 1.26. Then if it does not I want to see a throwback. I would expect this throwback to start near the end of the Gartley projection, 1.2750, 1.28.
Fan Yang Currency Analyst Commodity Trading Advisor
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