Diary of a Financier

Euro at Double Top

In Capital Markets on Wed 23 Mar 2011 at 15:17
  • EURUSD trying to break 1.42 double top
  • Also testing bearish trend resistance.
  • Upcoming action will determine whether the bull rally since 06/2010 is merely cyclical, or if it can confirm a reversal of the LT bear trend since 07/2008.

There’s a building bull trend in the Euro (EURUSD).  Note that there’s an overarching bear trend that began in July 2008, but since the weekly chart flashed divergence in MACD at the June 2010 bottom, a bull attempt has ensued:

EURUSD weekly- at trendline resistance with a bullish SStochastic. I expect the priceaction & MACD to make a bullish breach, but failure would confirm a continuation of the bear trend started in 07/2008.

 …a failure to break that trendline resistance (and subsequently confirm the move with a stab at 1.50) would end this rally–deeming it a mere cyclical bull within a longer-term bear overrule.

It’s the daily chart that has me expecting a continuation of the bull trend:

EURUSD daily- historical quad resistance (double top); momentum & trend favors continuation of the rally through the 07/2008 bear trend resistance.

 Any mention of a EURUSD bull is starkly contrarian given the headwinds in Greece, Ireland & Portugal.  While I’m trying to resolve the fundamental case with the technical, I’ll watch for confirmation in the charts.

–Romeo

Advertisements
  1. […] the heels of my entry at the end of March, the Euro (EURUSD) has surpassed its short-term resistance & double top at […]

Comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s