TEN Exclusive: EURUSD: Rejection Candle to Trigger Corrective Recovery
Friday, January 22nd, 2010
EURUSD – With a 1.4028 test generating a reversal candle on Thursday following the pair’s break down through the 1.4216 level, its Dec 22’09 low on Wednesday, EUR is now shaping up for corrective recovery. EUR was seen strengthening in early trading today and if further build up on that occurs further strength will then target the 1.4176 level, its Sept 01’09 low and next the 1.4216 level, its Dec 22’09 low. We expect these two levels to reverse roles and provide resistance thereby turning the pair lower again. Other resistance levels are located at the 1.4262 level, its Jan 08’09 low with a cut through there creating scope for further gains towards the 1.4446/79 levels, its Aug 05’09/Oct 02’09. To the downside, a failure to build on its current strength will call for a decline towards the 1.4044 level, its Aug 17’09 and subsequently its Jan 21’10/big psycho levels at 1.4028/00. Below the latter will extend further weakness towards its July 08’09 low at 1.3831 ahead of the 1.3747 level, its Jun 16’09 low. We retain our short term downtrend view on the pair as we expect its corrective recoveries to end and resume its broader weakness. On the whole, while the 1.6216/1.4176 levels hold as resistance, downside risk remains entrenched.
Support               Comments
1.4044                 Aug 17’09 low
1.4028/00            Jan 21’10/big psycho levels
1.3831                July 08’09 low
Resistance           Comments
1.4176                 Sept 01’09 low
1.4216                 Dec 22’09 low
1.4262                 Jan 08’09 low
Directional Bias
Nearer Term – Bearish
Short Term – Bearish
Medium Term – Bullish
Performance (%)
Past Week: +0.25
Past Month: -4.66%
Year To Date +0.29%
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