Chart of the Day - 3/05/2010 – EUR/USD

3/05/2010 – EUR/USD – Price action on EUR/USD, a daily chart of which is shown, continues to languish in consolidation despite a false upside breakout above the top (around 1.3700) of the current short-term trading range earlier in the week. The month of March could likely see continued bearishness for EUR/USD in line with the currently prevailing downtrend. Having just this week reached down to hit a new 9-month low just above 1.3400 support, price could potentially go on to target further support levels to the downside. A key downside support target on any strong breakdown of the current trading range, below the noted 1.3400 support, resides around the 1.3100 price region. Dynamic upside resistance within the context of the strong overall downtrend currently resides around the downtrend resistance line extending from the December 2009 high. Strong static upside resistance, in the event that the current trading range is broken to the upside, continues to reside in the 1.3800 price region.
 

James Chen, CMT
Chief Technical Strategist
FX Solutions
 

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(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)