(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; chart patterns in white; 50-period simple moving average in light blue.)
4/13/2010 – EUR/USD – Price action on EUR/USD, a daily chart of which is shown, has yet to fill the substantial gap up that occurred in the very beginning of this new trading week. After establishing an approximate double-bottom low late last week, price action rose swiftly with the noted gap to reach a high of 1.3690 on Monday before retreating back down. As mentioned, the inter-week gap has not yet filled, but could soon be preparing to do so. In the event of a gap fill, an immediate downside support target resides around the key 1.3400 price region, with further downside support around the long-term double-bottom low in the 1.3265-80 price zone. To the upside, the key level to watch continues to be 1.3800. If 1.3800 continues to be respected, the overall downtrend should continue to be intact, while a breakout above that key level would place the current downtrend at serious risk of trend change/reversal.
James Chen, CMT
Chief Technical Strategist
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