European Pair Review

Eur/Usd

The four hour trend is short. The oversold reads on the near-term charts favor a long technical bounce. Daily charts have held deep oversold for 5 sessions, as the pair challenges the 38% retracement of the Jul 2008 drop from 1.6000 to 1.2300 in Oct 2008. That is the same area that was important in the summer of 2009. Daily Chart: ATR is 130 pips. RSI is oversold. SMA is resistance.

Gbp/Usd

The four hour trend is short. The daily chart sideways crawl continues, as price action points are back to Dec 2008 and Oct 2009 areas, that if do not hold as support may need a parachute to hold the fall. It looks as though 1.5000 could be in play if the market gives up the long side of Gbp. Daily Chart: ATR is 160 pips. RSI is moving towards oversold. SMA is resistance. Favor a near-term short play if equities go short.

Usd/Chf

The four hour trend is long. The pair recently broke back higher, and out of the 4 hour chart channel that has been in place since September 2009. The near-term bounce off the 200-day simple moving average at 1.0535 was in reaction to Usd buying that was linked to Treasury note purchases. Daily Chart: ATR is 105 pips. RSI is hitting overbought. SMA is support. Favor a straddle.

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