The pair dropped to .8841, the 100 daily SMA, where it formed a hammer on the three-hour chart. It has since rallied to .8975 (near the 10 SMA of .8977) and just above the 200 SMA of .8946 where it began to falter a bit. I shorted this morning at .8958. The slight dip below the .382 retracement of .8317 to .9222 and the 200 daily SMA indicates weakness. I think it's possible the pair will drop to .8740/70, the short-term trend line from early June, fib confluence, and near the .8738 July 21 low.
Support is at .8841, .8770 (.382 retracement level of the move up to .9222), and .8738. A break below would be significant. Resistance is at .8977, .8991, .9027, and .9080.
© 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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