EUR/USD Bears Get Bit Between Their Teeth
22 January 2010
The FX Trader's view -
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WEEKLY CHART: Excellent resistance was seen at the 76.4% recovery level, when the whole upmove from the Mar-09 low was showing signs of maturity. The structure of the fall suggests that bears' energy is far from spent - any s/term rallies should prove temporary. We have re-calculated our pullback levels, taking the Oct-08 low as the starting point - will 38.2% provide s/term support? - Probably. |
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DAILY CHART: The break below an earlier bull channel base plus 1.4623 03-Nov low gave a bearish signal, confirmed by violation of the 23.6% pullback level. The recent Dec-Jan bounce was meager, finding resistance ahead of that 1.4623 low (and close to the 38.2% bounce level at the time). Any rebound from around the 38.2% pullback area should be short-lived, dying out ahead of the 1.4582 13-Jan high. |
Whilst the lower pullback levels should be kept in mind (see Weekly chart) we draw attention here to the 1.3737 Mar-09 high which previously provided good support in Jun-09, but more importantly to the 1.3672/54 area, an equality target (1.5144-1.4216 decline extended off 1.4582 high) and Fibo projection. We are minded to give these more emphasis than the pullback levels. A better rebound from near here would be sought.
Philip Allwright
Mark Sturdy
Seven Days Ahead
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