EURUSD Recovering, Testing Fib Resistance

Quote of the day: “Nobody got anywhere in the world by simply being content.” – Louis L’Amour

EURUSD – 1.4177 @07:59 GMT

Good morning. The euro is currently recovering some ground, testing resistance at 1.4200 formed by 61.8% retrace value of 1.4354-1.3970 of on reports that China may increase purchases of European bonds. The daily chart is still bearish as the pair doesn’t approach 1.44 but the 4-hrs charts are bullish at time of writing, as the 1.4130/50 resistance was breached and is probably providing support now. The remaining half of my short position was closed at breakeven and I’m looking for more selling opportunities on signs that downtrend has resumed. Today’s notable events in the Economic Calendar are Trichet’s speech, US GDP and Initial Jobless Claims.

Trading strategy: looking to sell on potential break below 1.4130 / 4-hrs bar close below, initial stop at 1.4180(0.5% risk), target open

Support: 1.4130/50, 1.4100, 1.4030/50, 1.3970/00, 1.3900 and 1.3850
Resistance: 1.4200, 1.4250, 1.4300 and 1.4400
Market sentiment: long term – mixed, medium term – bullish, short term – bearish, intraday – bullish

EURUSD 4hrs chart 5-26-2011
EURUSD 4hrs chart 5-26-2011

About abwehra group

The Art&Science of Trading Gold
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