EURUSD: Medium Term Bearishness Continues To Target The 1.2484 Level.
EURUSD: A second day of downside weakness has seen EUR continuing its decline Wednesday following a loss of its key support at 1.3259.This development has turned its medium term bearishness towards a strong support located at the 1.2484 level, marking its Oct’08 low where a break will set the stage for a decline toward its Jan/April’06 highs at 1.2334/24 with a turn below there extending losses towards the 1.1827 level, its Mar’06 low. The continued negative price momentum and daily studies remain supportive of this view. On the other hand, if a nearer term halt in price occurs, recovery could shape towards its Jan’07 low at 1.2866 ahead of the 1.2980 level, its Jun’06 high and then its .618 Ret (0.8231-1.6038 rally, monthly chart) at 1.3058.We expect the latter level or even the 1.3259 level to cap such upside correction and turn the pair to the downside again. On the whole, as long as the pair continues to trade and hold below the 1.3058 and 1.3259 levels, its medium term bearish structure remains valid.
SupportComments
1.2484 Oct’06 low
1.2334/24Jan/April’06 highs
1.1827Mar’06 low
ResistanceComments
1.2866Jan’07 low
1.2980Jun’06 high
1.3058.618 Ret (0.8231-1.6038 rally, monthly chart)
1.3259YTD low
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