Wednesday March 10, 2010 - 20:37:34 GMT
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FXTimes: Daily Technical Update EUR/GBP Exhaustion or Breakout
EUR/GBP Exhaustion or Breakout
- Daily and 4H: The EUR/GBP pair is nearing/testing
a long-term declining resistance â€“ from a large congestion pattern. You
can see this more clearly in the weekly.
- The stochastic in both the Daily and 4H charts are overbought but
has not shown signs of reversal yet. In anticipation, we have several
possible scenarios, breakout or exhaustion. Exhaustion is a strong
second attempt that might seem to break out, but turn into clear-out
- Its probably best to be prepared for both. The 0.9150 level is
important. A strong break above suggests furter rally first to 0.94,
then possibly 0.96 (see in weekly).
- Otherwise, it tops off and returns into the triangle seen in
weekly. Then a break below the rising trendline seen in old in 4H chart
confirms a decline to test the rising support of the triangle, near
- Weekly: The weekly shows the breakout scenario
towards 0.96, with a possible first resistance at 0.94. The swing
projection is shown with a blue line.
- This would mean the congestion period is over, and actually further bullish outlook could be anticipated.
- Otherwise, if congestion continues, the market declines from 0.9150
and heads towards 0.88 where it will again meet support. The swings are
gradually smaller, but eventually will breakout of the triangle.
- A break below the rising support near 0.88 spells a swing
projection to the 0.8550 area. A larger degree swing projection goes to
the 0.81/0.8050 area, which we see in the left side of the screenshot,
is a previous resistance area.
- Of course the more scenarios we speak of, the more likely the
market will hit one of them. That is the idea to begin with, but as the
market starts to show more clues, some scenarios become more dominant.
- For now, I would stalk the current rally towards 0.9150 and see if topping action occurs there.
- In the weekly, you may want to consider the fact that the SMA50 is
way above the SMA200, and suggests the more likelihood of bullish
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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