EURUSD: Loss Of Momentum At The 1.3298 Level Leaves EUR Aiming For A Recapture Of Its YTD Low.
EURUSD- Although a first weekly higher close occurred the past week since EUR tumbled off its Sept 22’08 high at 1.4867 to hit a low of 1.2330 on Oct 28’08,that strength waned Thursday and Friday ahead of the 1.3259 level(Oct 10’08 low) pushing the pair to as low as 1.2668. This is coming on the back of a failure at 1.3298 and subsequent hammer candle pattern (top reversal signal) formation. We maintain that the pair’s corrective recovery started at the 1.2330 level has halted and opened up downside weakness back towards its YTD low at 1.2330.A clearance of the latter is now envisaged to trigger its medium term decline towards the 1.2134 level, its .50 Ret (its 0.8231-1.6038 high, monthly chart) followed by the 1.1827 level, its Mar’06 low and then its Nov’05 low at 1.1640.Longer term charts remain supportive of this view. Resistance level are located 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) with a break through there targeting the 1.3259/98 level, its Oct 10’08 low/Oct 30’08 high. On the whole, having reversed its corrective recovery off the 1.2330 level, risk of a decline retargeting that level and beyond is now expected
Directional Bias:
Nearer Term –Bearish Short Term –Bearish Medium Term –Bearish
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