(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; 50-period simple moving average in light blue.)
7/10/2009 – EUR/USD – Price action on EUR/USD, a daily chart of which is shown, once again retraced back up to re-test a key uptrend line on Thursday after having broken down below the same trendline in the beginning of the week. This bullish pullback, however, was in the process of being reversed as of Friday morning, as the EUR/USD bears came back into play to push for a bearish continuation of the trendline breakdown. This potential bearish continuation, however, would only be confirmed on a significant drop below the 1.3830 breakdown low. If this occurs, immediate further support to the downside resides in the key 1.3750 price region. And any subsequent break below that important level would be a substantially bearish indication for the pair that would place the current general uptrend in clear jeopardy of being reversed. To the upside, the apparent price level to watch for continues to be the 1.4335 level, which represents the highest high in the current uptrend. In the event of any near-future breakout above that level, an uptrend continuation will have been confirmed.
James Chen, CMT
Chief Technical Strategist
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