Forex: EUR/USD could see some upward correction this week

By IBTimes Staff Reporter | December 21 2009 3:08 AM

FXstreet.com (Barcelona) - The Euro has been going through a steady downtrend during last two weeks, dropping from 1.5145 to 1.4260 low so far, reaching heavily o9versold conditions, which according to Carol Harmer, technical analyst at charmer charts, increases the odds for a corrective upswing this week.

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The Euro could appreciate from current areas during the week, up to 1.4700, says Harmer: We are showing extreme oversold on the daily charts and therefore this week you may experience a corrective bounce back. However correction looks limited to the break point of 1.4700 and sellers will be waiting here to drive this lower.

On the downside, Harmer points out to 1.4250 first and then to 1.4120 as key support levels. After correction look for the market to come back and exceed through 1.4250. The downside target would initially be 1.4120. This area represents the weekly 38% fib level and as such will offer good support. However the trend now looks to be turned to the downside so continue to sell into strength or sell a loss of 1.4100.

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