Chart Of The Day: EUR/USD

9/12/2008 - EUR/USD - Price action on the 4-hour chart of EUR/USD, as shown, has progressively formed a parallel downtrend channel within the past couple of weeks. This channel has several touches on both sides, and as of Friday noon (New York session), price has reached resistance at the top of the channel once again. This represents a rather significant correction within the context of the current overall downtrend. Any continuation of this correction via a strong breakout with a close above this channel could eventually target further resistance up around the 1.4400 region. A bounce back down at or near the downtrend channel resistance, on the other hand, should bring price back down to the 1.4000 psychological region, perhaps then targeting the bottom of the channel once again.

James Chen
Chief Technical Analyst

FX Solutions

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(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; downtrend lines in red; horizontal support/resistance lines in yellow; 200-period simple moving average in light blue.)