EUR/USD 1.3884 – 1 February 2010

EUR/USD Open 1.3874 High 1.3985 Low 1.3854 Close 1.3857
Euro/Dollar was under pressure on Friday, in search of support, after news that tightening the monetary policy in China may derail global economic recovery, and damp trading appetite. The Euro dropped from 1.3985 to 1.3865, closing the week at 1.3857. Our expectation remain in favour of the Dollar for now. Convincing break bellow the nearest support and this morning’s bottom 1.3854 may trigger stronger downward momentum towards next objective 1.3766. In upward direction the nearest resistance is represented by Friday’s top at 1.3985, and next resistance at 1.4095 is the upper limit of the bearish channel formed on the 1 hour chart. Break above it may seriously threaten the bearish perspectives and lead to further recovery of the Euro. Quotes move below 20 and 50 EMA for now, signaling for weak Euro. Negative, but increasing values of CCI and MACD suggest upwards correctional pressure. RSI entered the overbought zone, supporting the Dollar. Overall, technical indicators give mixed picture.
Technical resistance levels: 1.3985 1.4095 1.4190
Technical support levels: 1.3854 1.3766 1.3670

Trading range: 1.3895 – 1.3830
Trend: Downward
Sell at 1.3884 SL 1.3914 TP 1.3844

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