Wednesday January 20, 2010 - 16:55:00 GMT
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Daily Technical Update EUR/USD Stalking Breakout and Continuation
Daily Technical Update
January 20, 2010 (EUR/USD) Stalking Breakout and Continuation; 200MA Broken
- Daily: The EUR/USD broke below the 1.4200 support and did not stall at the 1.418 area of anticipated support. (Refer to Daily Video Technical Update 1.19.2010) It has also broken a long-term 200day MA suggesting we are in a major bearish mode.
- The intermediate projection is 1.3700. This is between the 61.8% and 78.6% retracement levels.
- However, the 50% retracement is the short-term projection at
1.40-1.4050, where there may be some support. Looking at the aggression
of the decline, there may not be much of a correction even if the
market does support it here.
- 4H: This is also the 150-161.8% expansion of the previous leg down, and is therefore a viable area for support.
- Looking at the 4H time-frame, we can see a possible correction to
the 1.4150-1.42 area. From here there may be a final swing towards the
- Another tool that can be used in re-entry into a trend is the
parabolic which is basically a trailing stop. When the Parabolic
switches to below the price, we have a correction of the decline. But
when it switches back above price action, it suggests end of correction.
- The parabolic re-entry method assumes the correction is 1-leg and
not complex. Used in complex corrections, the parabolic re-entry method
may be premature and create false signals.
Commodity Trading Advisor
Information and opinions contained in this report are for
educational purposes only and do not constitute an investment advice.
While the information contained herein was obtained from sources
believed to be reliable, author does not guarantee its accuracy or
completeness. CMS will not accept liability for any loss of profit or
damage which may arise directly, indirectly or consequently from use of
or reliance on the trading set-ups or any accompanying chart analyses.
Foreign currency trading is not conducted on an exchange. CMS is
acting as a counterparty to its clientsâ€™ transactions and as a result,
CMSâ€™ interests may be in conflict with its clients. Since CMS acts as
the buyer or seller in the transaction one should carefully evaluate
any trade recommendation provided by CMS or any of its solicitors.
Foreign currency trading involves a substantial risk of loss and may
not be suitable for all investors.
All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.
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