EURUSD—weak

With last Friday's close, Euro logged three consecutive weeks with a close below the 10- and 20-EMA on the weekly chart, currently at 1.3383 and 1.3365 respectively. Last week's candle was bearish with its long upper shadow. If you're not already short from last week (Friday high was 1.3360), this probably isn't the time to jump in but shorting on rallies seems the way to go. Support is at 1.3097/94 (200 daily SMA and Monday's low), 1.30 (psychological) and then the Nov. 30 low of 1.2969. Resistance is 1.3360/65 and 1.3398. Only if the pair closes above 1.34 would the near term outlook improve. On the weekly chart, you can see the pair is near the bottom of a channel—it could be starting down after the ABC correction but one can't rule out the possibility of one last upward push. RSI has broken below its upward trend line; once price does, then one should see further lows. The pair is in an overall downtrend. I don't think much of anything will happen for the rest of the year but keep stops tight regardless of direction.

Here’s the weekly 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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