FOREX: EUR/USD - SOME UPWARD PRESSURE

Last week’s commentary emphasized that the chart price for that particular week had more reliability that the technical indicators, for probable direction of the market. As it turns out, that view was correct.

The market moved quite easily through the first support level at 1.2700 (S1 on last weeks chart), and is currently stalled around S2, which was at 1.2580. Minor support at time of writing is at 1.2510.

There is some price versus indicator divergence which is causing some upward pressure. This could result in a rally lasting a few days. This is only likely to occur if there is a daily close above 1.2620. Such a move would run into stiff resistance at 1.2800.

The longer term trend of the market is still down, as long as there is no close above 1.2800.


Daily EUR/USD chart as at 19 February 2009 using NextVIEW Advisor. Click on chart for larger view.

TECHNICALS

MACD – down – in negative territory
Stochastic – the short term indicator shows evidence of upward pressure, but not confirmed.
MA 200 – long term support of the down trend.
EMA20 – short term support of the down trend
R1 – 1.2620 (not shown on the chart)
R2 – 1.2800
S1 – 1.1510
S2 – 1.2429

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Article and Commentary by Don Schellenberg. A trader and trading coach, he is a noted expert on Market Structure, Elliott Wave and Fibonacci. He trades the forex market.