21th September to 25th September 2009 Euro / USD
Posted by admin | Posted in Weekly and Daily Wake up | Posted on 22-09-2009
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EUR/USD pair has reached as high as 1.4765 of previous week however as per the diverging bearish situations during 4 hours MACD and RSI are considerably diminishing upside momentum. A top can be expected in sometime for a short term which however is yet not formed completely. This week initial bias can be assumed as neutral.
The break at minor support 1.4640 will be suggestive of the completion of the rise which begins from 1.4177. This will also be indicative of the deeper decline from 1.4500 support and further below it. The above 1.4765 will be indicating further increase. Since the EUR/USD pair nears the resistance level at 1.4867 key, further decline in the momentum and reversal signal can be expected.
In a larger view frame we cannot conclude that rise that begins from 1.2456 is the third leg in the consolidation pattern which commenced at 1.2329. This rally is assumed to be at the point of completion along with recent rise in the form of fifth wave in the five wave sequence pattern beginning from 1.2456. This indicates that upside may be limited by the resistance which would be formed at 61.8% retracement of 1.6039-1.2329 at 1.4622 and 1.4867. This is likely to bring about reversal finally.
Below 1.4177 support at the downside will signal the topping of EUR/USD which would be finally confirmed with the break of 1.3747 support. In this case a deeper decline is expected which would drive EUR/USD further 1.2329 low consequently.
In a larger picture frame, price actions beginning from 1.2329 can be considered as the consolidation in the down trend. This implies that fall beyond 1.6039 will be resumed once the consolidation gets completed. If the rally goes below 1.2329, then this will confirm that such down trend has put a test on 1.1639 key for long term support.
As long as resistance at 1.4867 is retained, we have to consider this long term bearish view for EUR/USD. However, 1.4867 break will stifle this bearish view and open a way for the more potent rise to put a test on the record of 1.6039 high.
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