09/17/08 8:56 am - EURUSD consolidating, upmove expected soon

Prediction: Last nights upside momentum faded when it hit resistance at 1.4270 which is now significant resistance and confirms the current price channel between 1.4270 and 1.4070. Once this channel is broken, new follow-through in that direction can be expected. Overall, the daily charts continue to look like they are forming a bottom, and RSI on the hourlies is slowly picking up, but still maintains a downward bias short term.
I expect the bounce at 1.4130 to be challenged again, followed by either another bounce at that level, or a bounce near 1.4070. This should be followed by a break of 1.4270, and further upside. EMA10, 20, and MA100 on the hourlies are converging, a good sign that a new directional move is about to come. Not quite there yet though, and current chart pattern leaves room for one more significant downside stab inside the channel.

Alternative Scenario: Alternatively, we could see a break of 1.4080, followed by further downside and a challenging of 1.3880.

Action Plan: Wait for next pullback and go long on a bounce out of either 1.4130 or 1.4070, or somewhere in between. Next deep bounce likely to provide the momentum for an upside breakout past 1.4270.

Support: 1.4131 HSppt    1.4083 HSppt   1.3881 L-9-11
Resistance: 1.4268 HRsst    1.4322 HRsst    1.4480- H-9-14
RSI: Hrl: RSI rolling over after breaking through decl. TL

Hourly Chart: