Falling off from 1.2739 this morning after the rejection yesterday of 1.2760 makes this pair look very weak. I have two shorts in play: one is from 1.2996 which is up 334 pips as I write at 7:06 AM EST; the other is from 1.2697 and I've moved my stop to breakeven on that one.
The pair broke below the short-term uptrend line I drew on the hourly chart yesterday. That line is currently at 1.2734. I've drawn another one which is currently coming in at 1.2615. This would be a third touch so let's see if it can hold. If it doesn't then I'd expect we'll see prices drop back to the low 1.25 area. Below 1.2516 is 1.2456 (the March 2009 low). Remember, though, as I pointed out yesterday that 1.25 is good support.
I quote again the French finance minister from Monday: "We will defend our currency and we won't let it be attacked by anyone." Yes! Right on! One small point, though, is it's harder to defend a slow bleed than it is an attack.
Support is at 1.2615/06, 1.2586, 1.2570, 1.2516 and 1.2456. Resistance is at 1.2739/60, 1.2803, 1.2880, 1.2963 (Fib confluence), 1.3038 and 1.3094 (Monday's high). Shorting on rallies continues appears to be the way to go.
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
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