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In the previous EUR/USD Weekly Review, we noted that both the SMAs were almost flat. Typical of ranging currency pair movement, a cross of the SMA 20 below the SMA 50 was needed before any considerations of further bearish movement beyond 1.42 was to be expected. While developments were made in the Greek budget deficit crisis, other Euro Zone countries such as Portugal and Ireland were reported to be facing problems too. The economic data coming from the US was not encouraging as well.

Technical Analysis:

Looking at the EUR/USD Daily Chart above, we noted a sharp dip for the currency pair. Slicing through the 1.4 support and the SMA 200 ( Black ), the bearish momentum was a strong one. Having said so, the subsequent bullish bounce suggests that the movement may be merely a knee jerk reaction.

SMA 20 = pointing downwards

SMA 50 = Almost flat

The bearish dipped had caused the SMA 20 to point downwards and cross the SMA 50. Should we see that the SMA 50 turns downwards too, we may be looking at a start of a bearish momentum. Nonetheless, any bearish movement will probably face strong supports such as the 1.4 region and the SMA 200. SMA 200 is a common moving average indicator used for long term analysis and usually offers a strong support / resistance.

Besides the recent test on 1.4, we last saw that during May 2011.

Continue on to for the fundamental analysis of the EUR/USD Weekly Review to understand more about the underlying market sentiments.

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