Currency Technical Report
George Antonakos from FXGreece at 02/05/10
EUR/USD
Resistance: 1,3730/ 1,3750/ 1,3800/ 1,3850/ 1,3910/ 1,3940/ 1,3980/ 1,4020-30
Support : 1,3700/ 1,3665-70/ 1,3640/ 1,3610/ 1,3570/ 1,3520
Comment : Dollar rose against all major currencies except the Japanese yen, as risk aversion dominates in the market, and important technical support levels have been breached.
Technically, euro is oversold in the daily and short term chart, while important support and targets have been reached. This makes an important –corrective- upward reaction possible.
As you can see in the monthly chart, the decline is likely to be resumed below 1.3000, and as a result we consider the upward reactions corrective and sell opportunities will emerge at important resistance levels.
Our basic target at 1,3730-50 was reached after yesterday’s sharp decline, and euro moved even lower during the Asian session, forming a low at 1,3670. An upward reaction is a very possible scenario, even though it may seem risky during such a strong downtrend..
The upward reaction is likely to start from yesterday’s lows or a possible new low after the NFP announcement, towards our lower targets at 1,3610-40 area. First resistance emerges at 1,3850, followed by 1,3930 and 1,4020-50.
If our scenario is wrong , and euro moves below 1.3600, next target will be at 1,3420-50.
*Strategy : A possible move towards previous lows, will be used as a new buy opportunity, only with the intention to add more positions at 1,3620-30. Stops will be set below 1,3550, and our target will be at 1,3850 and 1,3930-40. Our positions will be small, as buy orders in a strong downtrend are extremely risky...
In case of an upward move before the announcement, we will try sell orders at 1,3760 with stop above 1,3800 and target at 1,3700 or yesterday’s lows.
*The above mentioned strategy refers to orders that we may follow for personal accounts, depending on the market analysis and the potential reach of resistance and support levels. We do not encourage buy or sell orders, as its effective use is based on correct risk management and the ability of position readjustment depending on current conditions...
