Bounce In EUR/USD On The Cards
22 January 2009
The FX Trader’s view
The slip back in the Euro from a 61.8% resistance area has been deep. But now, we are looking closer for the chance of a temporary rebound.
MONTHLY CHART: The extent of last year’s fall implies that a medium term bear move is underway, with long term bull momentum on the wane.
DAILY CHART: The early Jan break below the 1.3822 19-Dec low proved to be a very good bear trigger. In the FX Trading Guide we developed a 1.3080-1.2890 target, the base of which was the 76.4% pullback level, which has now been tested. We are now awaiting better reaction around this level, with better scope for a s/term bounce. As yet we have had no bull confirmation, so any purchases would be highly speculative. We would not see such a rebound as long-lasting and, ideally, resistance should emerge at/below that 1.3822 low. (Note how the Daily EUR/CHF chart is already recovering off a 76.4% support)
Note: The title of last week’s Update was misleading – it should have read ‘Bull Signal in Canadian Dollar Chart’, referring to the USD/CAD chart, with bearish consequences for the Canadian Dollar. Apologies for any confusion.
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