Posted: 20 Aug 2010 02:02 AM PDT

EUR/USD broke under the long-term uptrend support line that began at its year to date low on June 7th and extended up to now. A sharp fall sent the pair significantly lower. The move still needs to be confirmed. Update on the breakout

Update 9:55 GMT: EUR/USD is now at 1.2710.

Click on the graph to enlarge it.

Earlier in the week, EUR/USD made an attempt for the 1.2722 support line, that capped the pair at the beginning of July. This support line held strong, and the pair returned to trade in a range between 1.2780 and 1.2930, usually at narrower ranges.

The long term uptrend support starts on June 7th, when the pair reached a year-to-date low of 1.1876. It was then formed on three consecutive days – June 29th, June 30th and July 1st – as EUR/USD traded around 1.22.

It then climbed high above this line and approached it again only on this Monday, August 16th, when it reached 1.2734, just 5 pips above the uptrend support line, when James Chen explained how the pair respects this line.

As time passed by during the week, the uptrend support stood on 1.2797 on the daily chart. EUR/USD flirted with this line earlier, and then made a sharp move under it.

Euro/Dollar now stands on 1.2747. In order for this move to be confirmed, the pair needs to breach the flat support line of 1.2722. The move can be very violent.

On both sides of the Atlantic, no indicators are released. There are no other news. The market digests the global slowdown, and the technicals play an important role on today’s move.

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EUR/USD Aug. 20: Euro Around Long Term Support Again

Posted: 19 Aug 2010 10:36 PM PDT

EUR/USD made a round trip and now returned to the area of the long term uptrend support. Will it close the week above the line? Or will it collapse? Here’s a quick update on fundamentals, technicals and community trends.

EUR/USD approaching long term support line – click to enlarge

EUR/USD Technicals

Asian session: Busy session – EUR/USD traded in a very narrow range in a quiet Asian session, between 1.28 and 1.2840.
Current Range is between 1.2797 to 1.2930. Significant support at 1.2797. Explanation below.
Further levels: Below, 1.2722, 1.2611, and 1.2460. Above 1.30, 1.3114 and 1.3267.
Medium term: On August 10th, EUR/USD lost a steep uptrend channel that began on June 29th. It is now consolidating.
Long term: Less steep uptrend channel began on June 7th, from the year-to-date low of 1.1876 and continues to support the pair. For today, it stands on 1.2797. A loss of this level will trigger a sharp fall.

EUR/USD Fundamentals

Nothing on the agenda today.

EUR/USD Sentiment

Market is in risk aversive mood. This means that bad US indicators are dollar positive.
Yesterday’s worrying US figures temporarily sent the dollar down, but these losses were erased quickly.
Moves towards the end of the trading week will cause high volatility, especially around the close of the European session.
Currensee Community: 58% are Short, 42% are long. This is a small shift towards shorts- yesterday it was 55:45. These are 905 open positions in real accounts trading this pair at the moment.

Note – This is a new and still experimental section on Forex Crunch. It’s still in development.

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Forex Daily Outlook – August 20 2010

Posted: 19 Aug 2010 02:00 PM PDT

We finish the week with some interesting news in Canada CPI, Ric Battellino speech in Redcliffe and more. Let’s see what awaits us today.

In Canada, Core Consumer Price Index (CPI); the price of goods and services purchased by consumers, excluding the 8 most volatile items has decreased by 2% and Consumer prices account for a majority of overall inflation. Important to currency valuation since rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate.

More in Canada, Consumer Price Index (CPI), the price of goods and services purchased by consumers decreased by 1%. Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate.

For more on USD/CAD, read the Canadian dollar forecast.

In Australia, Reserve Bank of Australia (RBA) Deputy Governor Ric Battellino speaks at the Moreton Bay Better Business Luncheon, in Redcliffe and his public engagements are often used to drop subtle clues regarding future monetary policy.

For more on the Aussie, read the AUD/USD forecast.

In New Zealand, Credit Card Spending, the total spending facilitated with a credit card has stabilized on 4.5% and it’s correlated with consumer spending and confidence – rising debt levels are a sign that lenders feel comfortable issuing loans, and that consumers are confident in their financial position and eager to spend money.

That’s it for today. Happy forex trading!

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Forex technikal and fundamental analysis

Aug 20, 2010

Forex Crunch EUR/USD Drops Under Long Term Uptrend Support

Forex Crunch EUR/USD Drops Under Long Term Uptrend Support

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