EURUSD: Hammer Highlights Completion of Corrective Recovery, Retest Of The 1.2330 Level Envisaged.
EURUSD: Test and rejection of the 1.3259 level, its Oct 10’08 low Thursday has left the pair halting its recovery off the 1.2330 level and opened up downside risk towards retesting its YTD low. A hammer candle pattern (top reversal candle) is now in place on the daily timeframe and its efficacy remains valid as long as its top (1.3296) is unbroken. Medium term downtrend resumption is in the offing as a follow-through to the downside on the mentioned hammer was seen in early morning trading today pushing the pair to as low as 1.2670.Its Oct’06 low at 1.2484 is now being aimed at ahead of its Oct 28’08 low/Jan/April’06 highs at 1.2330/24.A clean break and hold below here will trigger the resumption of its medium term downtrend towards the 1.1827 level, its Mar’06 low and eventually the 1.1640 level, its Nov’05 low. We continue to watch G10 currency universe and our own 7 currency model which are either spotting one reversal candle or the other suggesting price weakness in the present corrective recoveries. Resistance for EUR are now seen at the 1.2728 level, its Oct 22’08 low and the 1.3005/58 area, its Oct 23’08 high/.618 Ret (0.8231-1.6038 rally, monthly chart) and then the 1.32596 level, its Oct 10’08 low/Oct 30’08 high. On the whole, EUR’s medium term decline off the 1.6038 level is now at risk of being activated following its rejection of higher level prices.
SupportComments
1.2484 Oct’06 low
1.2330/24 Oct 28’08 low/Jan/April’06 highs
1.1827Mar’06 low
1.1640Nov’05 low
ResistanceComments
1.2728Oct 22’08 low
1.2866Jan’07 low
1.3058/05Oct 23’06 high/.618 Ret (0.8231-1.6038 rally, monthly chart)
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