Technical Trading Tips and Techniques by 
(Please click on the accompanying chart to enlarge.)
As noted on Friday’s Chart of the Day, price on the EUR/USD (a daily chart of which is shown) has approached to within just around 300 pips from the long-term uptrend support line that has been in effect since at least early 2006. Currently, this dynamic support resides around the 1.4400 level.
Even if this pair continues its almost historically extreme drop on Monday morning, the long-term uptrend line should continue to hold as strong support moving forward. If not, and there is an eventual breakdown, the long-standing uptrend in the pair will have been definitively reversed.
More likely, however, we should be seeing some kind of a correction soon, well before price actually reaches the uptrend support line. Monday morning should help set the tone for the new week’s prevailing direction. More updates to come as price action on this pair develops further.
- 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.