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EUR/USD Bulls’ Unease After Key Reversal Week

06 November 2009

The FX Trader's view


WEEKLY CHART: Recently there was a type of Key Reversal Week which, admittedly, could have been a clearer one as there was not the clear ‘higher high' prior to the ‘lower close'.

However, we ignore this clue at our peril - it might prove to be a timely marker of a turn in trend.

Ideally this would have been seen after a more accurate test of the 76.4% recovery level, but this is not essential.



In the FX Specialist Guide we have been looking at bull channel base projections - the s/term one has not been breached on a closing basis yet, which would be the first bear confirmation.

Currently, believers in the Key Reversal indication may try for speculative sales around 1.4950, just ahead of a s/term 76.4% bounce level (61.8% has already been reached, and sometimes this can be a good level in EUR/USD - we are looking at a lower risk entry, but with the chance it won't be seen). The 1.5061 high offers a nearby risk level for stop purposes.

Note lower key support is offered by the prior 1.4446/04 prior highs area, which also incorporates the main 23.6% pullback level and the next bull channel base projection - closing below this would provide a further clear bear sign.

Philip Allwright

Mark Sturdy

Seven Days Ahead


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