Chart Of The Day: EUR/USD
12/30/2008 - EUR/USD - A couple of days before 2009, erratic price action on the EUR/USD daily chart, as shown, continues to waver in a sideways consolidation. This trading range has been in effect for the past week after price pulled back to a key 38.2% Fibonacci retracement level within the current uptrend. Whether this price action represents simply an uptrend pullback or the beginnings of a bonafide bearish reversal remains to be seen. Early 2009 should provide much stronger guidance for this major pair. A substantial break above the 1.4700 level should tag the current retracement as merely a normal pullback within the context of a strong, continuing uptrend. Conversely, a significant drop below the 1.3800 region could signify that the current retracement represents the beginnings of a downside reversal, which could potentially mean that dollar recovery may be the new direction to start off the new year. Happy New Year!
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.)
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