FX Global currency watch
below 1.35, which with the rate now trading at 1.3280 we expect to act as a primary resistance level, followed by the pre- breakdown high in November 2011 of 1.3815 should there be a further shift higher.
We don’t see it getting much stronger than that barring so met h i n g ca t a s t r op h i c in the U.S. and this last level also coincides with s o m e w h e r e around the rate’s average (1.3789) for the past 12 months.
FX
markets do have a habit of becoming ran g e - b o u n d when the outlook is a little muddy and it looks like we are in the process of forming a top in this p ar t i c u lar pair.
trading bias, the Euro is still in a clear downtrend, one that has been ongoing since the spring and summer of 2008, when the 1.60 region provided mighty resistance.
The lows of 1.1877 were plumbed in the early summer of 2010, so while on the one hand
On a short-term basis, we would also make a case that the market has already rejected one serious resistance level if only looking at price action over the past few months, the 61.8% retracement level of the beginning of the decline in October 2011 from 1.4247 to the recent lows of 1.2624 stands at 1.3627, above the recent peak. We
think EURUSD Chart It looks like we are in the process of forming a top in this particular pair
Whether trading EUR/USD from either a technical or a fundamental standpoint, or perhaps both as some of us tr y to
do, there is a compell ing argument that regardless of 10 FX TRADER MAGAZINE April - June 2012
a near 25 percent rally from those depths to a high of 1.4890 in 2011 may seem bul lish, the fact that we have not since been able to reclaim that territory surely sends a dire warning
to both
technicians and fundamentally geared traders alike.
that a short position in the mid- 1.30s with a stop-loss just above the r esis t a nc e region say, 1.3885, may be a nice s t r a t e g y if looking for some d ow n w a rd mome n t um to reemerge and perhaps retest and even break the recent lows.
It will certainly be interesting if the market does reverse course from its current stance of being moderately bul lish towards the Euro.
If 1.2624 is tested
again, based not only on the old trading adage of “double- bottoms hold, triple bottoms
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