Directional Bias:
Nearer Term –Bearish
Short Term –Bearish
Medium Term –Bearish

Formation Of A Shooting Star Candle To Trigger Further Downside Weakness

EURUSD - With the pair’s break out of a triangle and its rise off the 1.2423 level cut short after failing to push through its Nov 25’08 high at 1.3081,it has formed a shooting star candle pattern(top reversal signal) and increased the chances of further downside losses. We now see that decline targeting the 1.2423 level ahead of its strong support residing at the 1.2330 level which also combines as its range bottom.

Penetrating and negating there will open the door for lower prices towards the 1.2134 level, its .50 Ret (its 0.8231-1.6038 high, monthly chart) and then the 1.1827 level, its Mar’06 low. Its daily studies continue to trend lower suggesting further declines.

Conversely,in order for the pair to reduce the present downside threat a close above the 1.3081 level is required to signal more upside gains towards the 1.3259/98 level, its Oct 30’08 high/Oct 10’08 low. This zone and the 1.2330 level remain the trigger for any meaningful directional moves either way. On the whole, with upside failure seen, EUR should now aim at its range bottom/YTD low at 1.2330 and beyond.

This entry was posted on Sunday, November 30th, 2008 at 7:25 pm and is filed under Weekly market comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.