06/23/09 10:24 am - EURUSD: Strong resistance at 1.4125

Strong rally sliced through several strong resistances and took us back all the way to 1.41. My long target was hit for a nice profit of 142 points, which felt good after the 131 point loss I took two days ago.

On the dailies, it looks like we got a bottom in place at 1.3747. Now heavily overbought, we’re approaching strong resistance at 1.4125, and I expect this level to hold, given that the RSI is already at 80. That, and the fact that this rally started after a downleg without any major upward consolidation phase, suggests a strong pullback will happen first before this upmove continues. I do expect another strong upleg following this one as soon as RSI has corrected back to neutral (45..50).

In the short term, I think a decline to the 50% Fibo at 1.3962 is the most likely scenario. I went short at 1.4095, stop tight at 1.4150, and target is 1.3970.

Support: 1.4013 Fibo62, HRsst   1.3962 Fibo50   1.3912 Fibo38, HSpptRsst

Resistance: 1.4125 SpptRsst   1.4177 H-6-11   1.4235 Rsst

RSI: Hrly: heavily o/b, Dly: neutral

Hourly Chart:

Daily Chart:

June 23, 2009 · Filed under Uncategorized

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