EUR/USD - Weekly Forex Analysis for April 13-17, 2009

Posted on April 11, 2009 at 16:32 in Analysis by James Chen



EUR/USD (a daily chart of which is shown) was bearish for the entire past week as price retested and then bounced down off a long-term downtrend resistance line (extending from the 2nd test of the 1.6 all-time high last July), and then subsequently broke down below a short-term uptrend support line (extending from the 1.2455 low in early March). By the past week’s close, price had retested strong support around 1.3100, descending all the way down to 1.3088, before being tentatively rejected by support. The upcoming week of April 13-17, 2009 should bring some substantial price action after the major holiday weekend. To the upside, strong resistance still resides in the 1.3300 price region, with further dynamic resistance around the noted long-term downtrend resistance line. At this time, the directional bias continues to be bearish overall, as this pair is still within the bounds of a long-term downtrend. Any break below the 1.3100 region should easily target major support/resistance around 1.3000. And any significant breakdown below this latter level would be a considerably bearish indication that could target further key support around 1.2750 to the downside.

James Chen, CTA, CMT