In a frustrating week, laced with a lack of meaningful price movement and conflicting signals, this pair has been one of the most frustrating. The little rally up to .8548 is pushing the triangle interpretation I wrote about yesterday and is just above the 10 day SMA. However, I also wrote yesterday that if this is examined as an ABC correction, wave C equals A at .8565. Certainly if it gets much above this, it would have pushed through the 200 daily SMA at .8562 and overcome some resistance lines as well and one would have to consider that higher highs are in store, possibly up to .8630. Until that point, my view is still bearish. I'm not posting a chart since not much has changed from yesterday but if you look at the hourly you can see bearish divergence in RSI.
Strong support is at the Nov. 11th low of .8450. It hammered out a base here and is also the .618 retracement of 8143/8941 and a price support. A clean break through here would be lovely for shorts and upsetting to longs.
© 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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