FOREX: EURO/US Dollar Analysis - 23 April

The market easily penetrated the 1.3100 support level and moved down to test support level number two at 1.2945 (S2 on last week’s chart), eventually reaching a low of 1.2885 before turning upwards.

Now the level that was support around 1.3100 has become a potential level of resistance to the current up-move. Failure to close above 1.3100, and more importantly, above 1.3170, will send this market sideways or downwards to test the new support level (S1 on the chart), and perhaps much lower.

On the upside, a break above 1.3170 would likely send this currency pair upwards to test the declining 200SMA and down-sloping trend line. A near-term test towards the recent low of 1.2885 is at least a possibility within the next several days.


Daily EUR/USD chart as at 23 April 2009 using NextVIEW Advisor. Click on chart for larger view.

TECHNICALS
Stochastic – rising.
MACD – down
NextView RSI – flat, below its’ 50 level.
R1 – resistance zone between 1.3100-1.3170
R2 – 1.3300
S1 – nearby support at 1.2885
S2 – 1.2730

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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.