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The market did not exceed the 1.4950 resistance zone after breaking the R1 resistance, which I wrote in my previous article. By failing to close above that number, the price pattern that at first appeared to have bull-trend potential, was proven to be only a bear market rally with typical ABC pattern dimensions.
At time of writing, the market has already penetrated last week’s S1 (support) of 1.3935. There is additional minor support at 1.3840. A close below there will target support much farther away between 1.3400-1.3100.
Daily EUR/USD price chart as at 2 October 2008 using NextVIEW Advisor
TECHNICALS
There is minor support at 1.3840 which may be sufficient to trigger another rally which should not exceed the zone from 1.4450 – 1.4650. Any upwards corrective rally should take several days before the down trend resumes.
S1 – support at 1.3840 (not shown on the chart)
S2 – more distant support at 1.3400-1.3100 (not shown on the chart)
R1 – 1.4450 – 1.4650
NextView RSI – clearly a bear market
MACD/Stochastic – MACD crossed down with Stochastic already in the oversold zone – a potential recipe for a quick corrective move to the upside.
US Dollar against Chinese Yuan (USD/CNY)
The market came near to, but didn’t quite touch my first support level (S1) of 6.7850, and then moved up. Although price as closed at 6.8351 for two or three successive days, it has a good chance of reaching to around 6.8633 before encountering a potential reversal area.
Daily USD/CNY price chart as at 2 October 2008 using NextVIEW Advisor
TECHNICALS
R1 – immediate resistance at 6.8391
R2 – resistance at 6.8633
S1 – support at 6.7856
Stochastic – in overbought zone.
NextView RSI – in positive territory
Commentary and analysis by Don Schellenberg
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