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EUR/USD Clear-out
- 4H and Daily: Last post, note was EUR/USD in between clearout and breakout. Confirmation of 1.5000 – 1.5050 holding as support would be confirmation for breakout. (Refer to Daily Technical Update 11.25.2009 EUR/USD).
- The volatility lull that lead up to Thanksgiving was shaken up before the US holiday was over. The sharp rally to 1.5140 on Wednesday was quickly reversed after the close of the US session. Then in the subsequent Asian, European, US and and then again in the Asian/European session, the markets pushed the pair all the way back down to the short-term range support where is rallied from at the end of last week.
- Once again, we are back in ranging mode, with the “breakout” now established as a “clear-out”. In the daily, the reversal formed piercing candle and a subsequent bearish candle confirmed the bearish interest after the “breakout”. Another signal of further bearish interest, or rather confirmation of the lack of bullish interest, is the bearish divergence with the stochastic.
- While these are reflection of weakness, note that long-term trend is still upwards, so a break below 1.4800 should suggest a short-term target to 1.4600 and not lower. If bottoming action occurs at 1.4800, consider short-term bullish outlook.
- A break below 1.4600 is significant and suggests we may have topped in the medium-/ long-term.
Fan Yang
Currency Analyst,
Commodity Trading Advisor