Wednesday, January 26, 2011

EUR/USD | Technical Analysis | 26 January 2011

EUR/USD | Technical Analysis | 26 January 2011

After yesterday’s shallow pullback EUR/USD has made a recovery rally to new highs. It is possible that from here there may be a more significant correction. The rate air-kissed the underside of a major trend-line from the June lows at 1.3720 today and it could reverse direction from here and fall, perhaps to support at 1.3640 initially and then maybe lower to 1.3590.

The whole move up from the 18th Jan also looks like an ending diagonal which also adds bearish overtones. Ultimately, however, price is not falling yet and momentum is stuck in overbought territory, and so without a confirmation it is too early to go short and still quite possible the rate might pop up and touch the monthly pivot at 1.3800.

by Joaquin Monfort, Analytical expert , Forex4You © 2011

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