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July 6 – EUR/USD – Prolonged sideways consolidation

July 6, 2009 at 10:14 am • Posted in General

EUR/USD Chart - July 6

(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; 50-period simple moving average in light blue.)

7/06/2009 – EUR/USD – Price action on EUR/USD, a daily chart of which is shown, has tentatively broken down below an uptrend support line extending from the late April lows. This breakdown is significant, but does not yet place the pair in immediate jeopardy of breaking its overall uptrend. This would occur only on a strong breakdown below the 1.3750 price region. Currently, the short-term bearishness in the pair is apparent, but price is still entrenched within a prolonged sideways consolidation, despite the trendline breakdown. Further bearish follow-through on this trendline break should target key support in the noted 1.3750 support/resistance region. To the upside, the 1.4335 resistance is still the key price level to watch, as a significant breakout above that level would confirm a clear uptrend continuation.

James Chen, CMT
Chief Technical Strategist, FX Solutions

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