FX TECHNICAL ANALYSIS FX EMERGING MARKETS – FEATURED MARKET – EUR/RON
EUR/RON extended the recovery from the 3.0941 extreme low recorded in July 2007 to reach a peak of 4.3510 in January 2009, before undergoing a two-legged retreat to 4.1165 & 4.0565, interrupted by a lower top at 4.3269. Fresh attempts to move higher commenced from 4.0565, but there was only a brief break-out to a new high in June 2010, reaching 4.3892 before immediately reversing to leave a potential higher low at 4.2174. Te subsequent emergence of a lower top at 4.3276 has produced a deeper retreat through the (orange) 3 ½ year uptrend line connecting 3.0941 & 3.5015 to reach a low so far at 4.0647. Tis is just over the March 2010 key low at 4.0565, and a rally is now under way. With the long-term (blue) 260 week (5 year) moving average still rising at a steady rate and
the market remaining above it, the past 2 ½ years’ price action retains potential to be a prolonged consolidation phase ahead of an eventual resumption of the primary uptrend, targeted towards the 4.64-4.72 region. Tis marks a 50% advance from the 2007 low and a 100% upside projection from the 2 ½ year trading range. However, the immediate risk is for the current bounce off 4.0647 to leave a lower top below 4.3276, possibly near former support at 4.2174, and be followed by a deeper retreat in the direction of former highs at 3.9714 & 3.8354. Ahead of there, the aforementioned (blue) 260 week (5 year) moving average currently intersects at close to the psychological 4.0000 line, and successfully leaving a higher low above there will be encouraging.
MAJOR TRENDS AND TARGETS FOR FX EMERGING MARKETS As at 14 June EUR/CZK EUR/HUF EUR/PLN EUR/RON USD/ILS USD/RUR USD/TRL USD/ZAR
Current level 24.12 264.6 3.93
4.172 3.396 27.88 1.579
6.7535
Major trend Down
Sideways Sideways Sideways Down Down
Sideways Down
Major target 23.711 & 22.925
Trend change level 25.387
3.2043 & 2.7358 26.251 & 24.196
6.4318 & 5.9563
260.96 / 291.97 3.8238 / 4.2454 3.8354 / 4.3892 3.7484 30.896
1.3874 / 1.6293 7.3478
78 FX TRADER MAGAZINE July - September 2011
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