(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.)
5/24/2010 – EUR/USD – Bearish price action on EUR/USD, a daily chart of which is shown, has begun the new trading week by reversing much of the gains it made during the bullish correction of last week. This occurs within the context of a strong and steep overall downtrend. Monday’s price action broke down below the key 1.2500 price level, as well as below a short-term uptrend support line that represented last week’s bullish correction. With continued bearishness on this breakdown, price could initially target last week’s newly established 4-year low in the 1.2140 price region. Below that level, the key downside support target to watch would be the 1.2000 price region, which represents a significant technical and psychological price target level.
James Chen, CMT
Chief Technical Strategist
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