08/24/09 10:40 am - EURUSD: Bearish bias favored short term

The pair failed to break above its hourly declining trendline this morning, and just broke below its rising trendline for the second time (first break last night could not be sustained). The hourly downtrend momentum is accelerating, and we may see a third test of support at 1.4280, which could give at that point, opening the way to 1.42.

Long term, I expect to see range trading to continue and my bias is neutral. Deflationary fundamentals favor the dollar, however. Technically, only a break outside the 1.40..1.44 range will call for a sustained trend move.

I went short again at 1.4310 on the break of the rising hourly trend line. Stop at 1.4390, target 1.4210. Also, in favor of the short trade is the fact that the dollar index has been recovering slightly, and gold and the Yen have been down, while the Euro has still held up (divergence).

Support: 1.4277 Fibo62   1.4205 HSppt   1.4173 Fibo38, HSpptRsst

Resistance: 1.4375 SpptRsst   1.4446 H-8-5   1.4620 DFibo62

RSI: Hrly: neutral to bearish, Dly: neutral to bullish

Hourly Chart:

August 24, 2009 · Filed under EUR/USD

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