(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.)
5/14/2010 – EUR/USD – Price action on EUR/USD, a daily chart of which is shown, has just broken down swiftly below the key 1.2500 support level, establishing a new 18-month low and lending a significant additional bearish bias to this strongly downtrending currency pair. A continuation of the steep overall downtrend has now been confirmed, with price currently targeting a key downside support target in the 1.2300 price region. Any substantial breakdown below 1.2300 could potentially begin to target the technically- and psychologically-important 1.2000 level, which is also around a 161.8% Fibonacci extension of the most recent bearish run. The broken 1.2500 level should now serve as tentative upside resistance within the context of the strong current downtrend.
James Chen, CMT
Chief Technical Strategist
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