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(Please click on the accompanying chart to enlarge.)
As of this writing, price on the EUR/USD daily chart, as shown to the left, has just tentatively poked its head slightly below dynamic support in the form of the long-term uptrend support line. Keep in mind that as of now, though, this was just a tentative poke. It is not yet considered a bonafide break. But keep a close eye on this pair for any subsequent fast-breaking action to the downside. If this does not occur today, we could still be looking at an impending bounce (even if a small false break occurs).
Update: As of Wednesday afternoon (New York session), support has indeed held strong, as price has made a pronounced bounce up off the uptrend support line.
- James
James Chen is the Chief Technical Analyst at FX Solutions,
a leading Forex broker. He is also a registered Commodity Trading
Advisor (CTA) and a Chartered Market Technician (CMT) Level 3
candidate. At FX Solutions, Mr. Chen writes daily currency analysis,
conducts forex trading seminars, and has authored numerous articles on
currency trading and technical analysis for major financial
publications. His upcoming book, Essentials of Foreign Exchange Trading
(John Wiley & Sons), will be released in early 2009.