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EUR/USD Update - Traversing a Down Channel

Posted on September 9, 2008 at 12:47 in Analysis by James Chen

(Please click on the accompanying chart to enlarge.)

As of early Tuesday morning, New York session, price on the EUR/USD 4-hour chart, as shown, has been rising within a relatively new parallel downtrend channel. Price just established the bottom boundary of this parallel channel (with a second touch) on Monday. A continued rise within this channel, which would constitute another minor correction in the larger downtrend, should target the channel’s top resistance line, which currently resides around the 1.4300 region. A return to lower price levels should meet support around the key psychological 1.4000 region, which would also coincide approximately with the bottom of the channel.

UPDATE: As of early Wednesday morning (New York session) price is consolidating around the middle of the abovementioned short-term downtrend channel. More updates to come as price action develops.

- 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.

13 Responses to “EUR/USD Update - Traversing a Down Channel”

on 09 Sep 2008 at 2:57 pm1St_Fx

Hi James,
Please give your thought analysis on kiwi/usd long term and short term prospective at your convenience.
Thanks.
on 09 Sep 2008 at 4:54 pm2James Chen

Hi St_Fx,

Thanks for your question. On a short-term basis, I see NZD/USD approaching resistance around the key 0.6800 area. A strong break of this level could take the pair further to 0.6880 resistance. But in general, I think this pair still has more room to go down. I am looking at the current bias as just a minor correction before a continuation to the downside. Thanks, St_Fx.

- James
on 09 Sep 2008 at 10:35 pm3Cahid

Hi James,
Can you please share your thoughts on GB pound/usd and GB /eur long term and short term prospectives ?Thanks.
on 10 Sep 2008 at 8:20 am4dilawar

hi james,

can u please comment on eur/dlr for this week.

regds
on 10 Sep 2008 at 12:51 pm5James Chen

Hi Dilawar,

Thanks for your comment! Yes, I will be posting ongoing updates on this pair. Thanks for visiting!

- James
on 10 Sep 2008 at 12:52 pm6James Chen

Hi Cahid,

Thanks for your comment! Yes, I will also be posting a GBP/USD chart soon. Thank you!

- James
on 12 Sep 2008 at 5:22 pm7salman

Can you please share your thoughts eur usd long term and short term prospectives ?Thanks.
on 15 Sep 2008 at 12:04 pm8James Chen

Hi Salman,

Yes, I will do that now. Thank you!

- James
on 17 Oct 2008 at 8:09 pm9Paul Walsh

In your opinion is it possible that the EUR/USD could get back to the 1.60 level like it was a few months a go?

Looking at charts (long term) , I believe EUR/USD might hit parity inside 5 months. Any thoughts on that?
on 20 Oct 2008 at 2:04 pm10James Chen

Hi Paul!

Sorry, I didn’t see your comment earlier. At this point, I don’t see a great likelihood that EUR/USD will return to 1.6000 in the foreseeable future. I will be posting longer-term charts with my opinion on this key pair soon. Thanks, Paul!

- James
on 25 Oct 2008 at 12:54 pm11Ruben

EUR/USD has been falling for months now, I think arounf 1.18 we may see a temporary bottom.
on 27 Oct 2008 at 12:48 pm12James Chen

Hi Ruben,

Thanks for your comment! I will be posting commentary very shortly on the EUR/USD.

- James Chen
on 10 Nov 2008 at 4:05 pm13Paul

Do you think the EUR/USD could reach parity within 3 months?

What could potentially happen if USD $1 = EUR 1 ?

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13 Responses to “EUR/USD Update - Traversing a Down Channel”