Chart of The Day: EUR/USD

3/18/2010 – EUR/USD – Price action on EUR/USD, a daily chart of which is shown, has formed a rising wedge pattern within the context of an overall downtrend extending from the early December high. This rising wedge occurs after price was once again rejected by 1.3800 resistance, and is a potentially bearish formation that is contingent upon a significant break to the downside. In the event of this strong bearish breakdown, which would lend strength to the robust prevailing downtrend, a key support target to the downside resides in the 1.3400 price region. Any further breakdown below that level would lend confirmation to an overall downtrend continuation. To the upside, the noted 1.3800 price region should continue to serve as resistance within the context of the current downtrend.

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.)