Euro has gone absolutely nowhere this week staying within a 316 pip range which is essentially the same range it has been in since the beginning of the month. On Tuesday there was a spike high to 1.3498; the low was 1.3182 yesterday and it's hovering not too far above there as of this morning. Bears would like to see a weekly close below 1.31 which seems a bit out of reach; bulls, on the other hand, would swoon over a weekly close above 1.35. This is out of reach.
The spike high on Tuesday is reminiscent of the Euro's spike high Dec. 18, 2008 (1.4721). On a weekly basis, it's causing a long upper shadow which is essentially bearish. A close below 1.3164 (last week's low) would result in an outside weekly candle. This may set the stage for further moves down. As I wrote Monday, I still believe the downward angle on the weekly chart is a bit steep so I'd like to see a rally to short.
Where might that rally go? The most recent high was 1.3359. You can see on the daily chart below that the Euro hasn't managed to break above a former uptrend line. That line is about 1.3392. Certainly a move to 1.35 would warrant a short position.
Support is at 1.3150, 1.3103, and 1.2969/33 (a fib and a speed line that has previously served as support).
Here's the daily chart:
© 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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