EUR/USD – Negative Reversal Signals Bearish Swing
Monday, August 30, 2010
, Posted by Usman Ali Minhas at 7:58 AM
AUD/USD – Assessing Head and Shoulders
- 4H: The EUR/USD completed a negative reversal signal during the European session, ahead of the US session. The slow rally last week from near 1.26 to 1.28 stopped at resistance of 61.8% retracement.
- The market has been declining since starting this week and looks to continue towards 1.2440. This is a swing projection.
- The 15-min, not shown here confirmed as the RSI broke below 40. The price action there also broke below the 50 and 200 Simple Moving Averages.
- The market should not go below the open on 6/21 1.2447. The high that day was 1.2466.
- The idea is that if the market closes below these levels, the long-intermediate term bullish outlook based on a specific wave count is invalid.
- The short-term look is a decline towards 1.2440. However the intermediate term look warrants us to look for bottoming and possibly consider the bullish scenario if a rally springs from this 1.2440/1.2450 area.
- Day: The daily chart shows the EUR/USD in a short-intermediate term decline resting above the cluster of 61.8% and 50% retracement levels near 1.26.
- If today’s candle were to close before the US session, it is an engulfing bearish candle. However we still have an entire session to go.
- The RSI is also resting above 40, so there is not bearish momentum confirmation yet, although it is close to one.
- If the 1.26 level breaks, the market may continue towards 1.2450 area which is a cluster of 61.8% and 78.6% retracement levels. As mentioned before, look for bottoming here. However if it breaks, consider the bearish continuation in the intermediate term and possibility of reaching to 1.22, and 1.19.
