EURUSD Testing Key Trendline Support

Quote of the day: “Even if you’re on the right track, you’ll get run over if you just sit there.” – Will Rogers

EURUSD – 1.4193 @06:30 GMT

Good morning. As you can see, the site has been revamped and redesigned over the weekend and cleaned up a bit, I hope you enjoy the changes. If you notice any errors or bugs, please let me know. Ok, back to charts now. The NFP figure was quite ugly so the markets went into risk-off mode on Friday, EURUSD following a basket of risk sensitive pairs to the downside after spiking to sessions highs around 1.4350. Selling into short-lived rallies or a break below 1.43, as noted on my Friday post, was the best thing to do – and nothing changed yet, so if one is looking to buy dips, I’m afraid the odds are against him. Support formed by the rising trendline connecting previous higher lows, as seen in the daily chart below, is currently being tested and a breakdown might turn ugly for the euro, extending the sell-off to 1.400 where next support resides. I’d much prefer a corrective rally from current levels in order to find a better selling level, therefore I’ll be watching the 1.4300 handle if the euro catches a bid.

Trading strategy: looking to sell on potential pullback to 1.4300, initial stop at 1.4360 (0.5% risk), target open

Support: 1.4150, 1.4100 and 1.400
Resistance: 1.4200, 1.4300, 1.4340/65 and 1.4400
Market sentiment: long term – mixed, medium term – bullish, short term – bearish, intraday – bearish

EURUSD daily chart 7-11-2011
EURUSD daily chart 7-11-2011
EURUSD hourly chart 7-11-2011
EURUSD hourly chart 7-11-2011

About abwehra group

The Art&Science of Trading Gold
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