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

Triangle Break Expected To Resolve To The Downside

EURUSD-As range trading dominates price action between the 1.2330 and 1.3298 levels, the symmetrical triangle formed within that range is expected to resolve to the downside. This is based on the fact that the pair’s primary trend is down and the present range activities are coming on the heels of a decline off the 1.6038 high. We see a decisive break and hold below the 1.2330 level activating further weakness towards the 1.2134 level, its .50 Ret (its 0.8231-1.6038 high, monthly chart) and the 1.1827 level, its Mar’06 low.

Daily studies are supportive of this view as they are trending lower.Conversely,if a follow-through to the upside on Friday’s reversal were to occur, its Nov 19’08 high at 1.2814 will be aimed at before its Nov 10’08 high at 1.2927.Other resistance levels are seen at the 1.3116 level, its Nov 05’08 high and then the 1.3259/98 level, its Oct 30’08 high/Oct 10’08 low .On the whole, a break of the latter or the 1.2330 level will be required to create meaningful directional moves.

This entry was posted on Monday, November 24th, 2008 at 8:09 am 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.