Jun 13, 2011

FX Path

FX Path

EUR/USD Plummet Pulls Back Around 50% Retracement, Still Bearish

Posted: 13 Jun 2011 10:11 AM PDT


EUR/USD (daily chart) as of Monday (6/13/2011) has pulled back after dropping precipitously for three consecutive days last week from the 1.4700 area highs. This bullish pullback occurs after a low of 1.4320 was hit, which is just under the 50% Fibonacci retracement level of the last major bullish run (from the lows around 1.4000 to the highs around 1.4700). Despite this pullback, the directional bias on EUR/USD continues to be to the downside in line with the trendline breakdown and 1.4500-level support breakdown that occurred late last week. The key immediate support target to the downside continues to reside around the 1.4250 price region, which is the 61.8% Fib retracement of the same bullish run. Further to the downside lies the longer-term bearish target around the key 1.4000 psychological support/resistance level.

 

(Click on chart to enlarge. Chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.)

 

James Chen, CTA, CMT
Director of Technical Research and Education
FXDD


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Gold Due for Larger Correction

Posted: 13 Jun 2011 07:12 AM PDT


Gold (daily chart) as of Monday (6/13/2011) has dropped back down to hit a key uptrend support line extending back to the January low around 1308. This occurs after price hit a high of 1553 one week ago, which failed to re-test the 1575 all-time high that was reached in early May. The near-term directional bias currently appears bearish in line with this price failure, and a larger bearish correction could soon be due. With price currently right at the noted uptrend support line, a significant breakdown below this line could trigger the correction. In this event, a key initial downside support target resides around the 1475 price region, which represents both a prior support/resistance level as well as the 38.2% Fibonacci retracement of the last major bullish trend run (from the January 1308 low to the May 1575 all-time high).

 

(Please click on the chart to enlarge. Chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average in orange; 100-period simple moving average in brown; 200-period simple moving average in dark blue; Fibonacci levels in magenta.)

 

James Chen, CTA, CMT
Director of Technical Research and Education
FXDD


This posting includes an audio/video/photo media file: Download Now

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