12/28/08 7:40 pm - EURUSD: Pullback expected

The pair is slowly trending upwards, and hit strong resistance at 1.4175. The hourlies are supported by a rising trend line, that will soon become unsustainable. The chart pattern on the hourly chart calls for a retest and likely false break of 1.3825, possibly stopping at 1.3805 (62.8% Fibo pullback of the current upleg), or 1.3750 (38.2 Fibo of the 1.23-1.60 daily range). Also, a touching of the daily EMA10 is expected just before the uptrend resumes.  But the long slow sideways section on the hourlies over the last few days could lead to a second 900-point downleg, completing the correction which could end at 1.33, the 38.2 Fibo of the current leg. Given this potential, I’m planning a short trade if the hourlies are rolling over within the next few hours, and 1.4175 is holding. A break of 1.4175 would favor further upside and the pullback should be limited.

Support: 1.4125 HSpptRsst    1.4000 HSpptRsst   1.3825 L-12-19

Resistance: 1.4182 DFibo50   1.4435 HRsst   1.4718 H-12-18

RSI: Hrly: supported by rising TL, Dly: supported by rising TL

Hourly Chart:

December 28, 2008 · Filed under EUR/USD

Leave a Comment