EURUSD Analysis – Jan 17, 2009

EURUSD’s downtrend extends further to as low as 1.3026 level. Deeper decline to 1.2800 to reach the next cycle bottom on daily chart is still possible next week, and the next cycle bottom is nearing. Initial resistance is at 1.3425, as long as this level holds, we’d expect downtrend to continue. Key resistance is located at 1.3540, a break above this level will indicate that the downtrend from 1.4719 has completed, and then further rally could be seen to 1.4400 level.

For long term analysis, EURUSD formed a cycle bottom at 1.2329 level on weekly chart. Consolidation in a range between 1.2329 and 1.4719 would more likely be seen in next several months.

eurusd daily chart