After a dramatic breakdown at the end of 2009 the move lower has notably slowed this year. Clear technical support has recently been found, but bulls so far remain reluctant to move from the shadows.

The FX Trader’s view

WEEKLY CHART:

The decisive break below 1.5000 support in Dec-09 has seen an unhindered slip back to the Mar-09 low.

Clear support has emerged around here.

DAILY CHART:

Following an unusual price swing in early Feb, which tested the Mar-09 low, we have been looking closer for evidence of a temporary bull resurgence.

At this stage a close above the 1.4700 23.6% level would provide an initial bull sign; a further one would be a close above the 1.4785 38.2% level.

Higher 1.5000 area, where several former lows reside, offers a tough barrier should any stronger recovery develop.

The overall structure of the breakdown from the 1.5150 area in Dec suggests that there is more downside to play for in due course – so any bounce should prove temporary.

Mark Sturdy
John Lewis

Seven Days Ahead
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Mark Sturdy, John Lewis & Philip Allwright, write exclusively for Seven Days Ahead a regulated financial advisor selling professional-level technical and macro analysis and high-performing trade recommendations with detailed risk control for banks, hedge funds, and expert private investors around the world. Check out our subscriptions.

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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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