Negative Key Reversal Week in EUR/USD Gives Bulls Pause

12 May 2011

WEEKLY CHART

A warning to the bulls appeared last week by way of a key reversal week.

This implies a better pullback could well be seen now, leaving the 1.5055 76.4% retracement out of reach.

DAILY CHART

In the FX Specialist Guide a s/term Fibo projection we had marked in was tested last week, prior to a retreat.

S/term support looks to be coming from around the 1.4155 18-Apr low, which coincides with a 38.2% pullback. Failure here would imply momentum loss.

Modest support is then offered by the 1.3861 02-Feb high, while key support comes from the current channel base and 1.3426 14-Feb low area.

In light of the key reversal week s/term rallies may well prove short-lived.