10/21/08 8:14 am - EURUSD: Key support broken, more downside likely

1.3256 was decisively broken last night, and downside momentum is strong. Abandoning my bullish bias and joining the bear camp at this point. Oversold hourlies are correcting but I expect a failure ahead of 1.3256, near the declining hourly trendline (1.3250). More weakness likely, and there is little support until 1.3055, the 38.2% Fibonacci retracement of the all-time-high (1.6037) to all-time-low (0.8230) range, which also coincides with the daily support/resistance zone around 1.3050..70.

Alternatively, we may see a break of the declining trendline and a return above 1.3256, which would call for futrher recovery.

Action Plan: I set a short entry at 1.3245, with a stop at 1.3320, target 1.3065.

Support: 1.3065 DSpptRsst    1.3055 Fibo62 of All Time Range    1.2970 H-5-15-06

Resistance: 1.3256 L-10-10    1.3287 L-10-20    1.3345 L-10-16

RSI: Hrly: capped by decl. TL, Dly: about to break below rising TL

Hourly Chart:

October 21, 2008 · Filed under EUR/USD

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