Forex Trading Technical Analysis (2010/08/20) EUR/USD Breaks Down Multiple Support Levels
(Please click on the forex chart thumbnail to enlarge)
8/20/2010 Forex Trading Technical Analysis (FXpath.com) – EUR/USD (a 4-hour chart of which is shown) as of Friday (8/20/2010) morning has broken down below multiple support levels, including a clean breakdown of an important uptrend support line extending back to the early June low of 1.1875 and a tentative break below key support at 1.2700, to hit a fresh one-month low. These support levels were noted in EUR/USD analysis earlier this week, when the trendline had been respected. The current breakdown places the 2+ month uptrend in EUR/USD at considerable risk of changing/ending. With continued bearish momentum, the tentative breakdown below 1.2700 could prompt price action to target further downside support in the key 1.2500 price region. The underside of the just-broken uptrend line should now serve as dynamic upside resistance in the event of a significant bullish pullback/correction.
(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.)
James Chen, CTA, CMT (bio)
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Comments
The wave is coming , a strong wave will be push Euro to a record low. The next support level is 1.18, once broken then god only know where the Euro heading to.
Thanks for your comments, John and Alvin. Yes, John, I agree that it is very possible for EUR/USD to re-test long-term lows. My bias is bearish on EUR/USD at this time. And yes, Alvin, that very well could be the case. Thanks again!
James Chen
Good analysis. It’s possible that the EUR/USD retest the yearly lows, don’t you think?