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Fibonacci Projection in EUR/USD Finally Reached

10 September 2009

For many weeks in the FX Trading Guide we have had a Fibonacci projection marked in on the Daily chart at 1.4545. It has been reached/modestly exceeded this week and we are now waiting to see what reaction now occurs – we have been assuming that a final bull leg was unfolding.

The old rising support/return line appears to be having some residual influence as resistance here.
Also note that the 61.8% level has been retested now.
We have been viewing recent strength as corrective/temporary ahead of another bear run.

We have been thinking that the somewhat choppy bull leg from 1.3747 Jun low was a final one, prior to a medium term bear phase.
Our initial target/projection for this, at 1.4545, has been reached now, with nearby 1.4620 61.8% level (admittedly previously eroded last Dec) offering a potential hurdle too.
S/term we must await the reaction here – an initial bear sign would be a break/close below the 1.4175 01-Sep low, which would imply a false bull break of the small channel top had been seen. We could then calculate retracement levels.
In the meantime the s/term bulls have to be respected, which is why we have maintained a bullish stance in the Guide for the time being.

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