The corrective rally which began on the 7th Feb is slowing down. After touching the 1.3680 highs and the 50% Fibonacci retracement of the preceding move the rate has fallen and is now going sideways. It will probably fall further and if it passes below the previous trough low at 1.3611 that will be a strong bearish signal as the rising sequence of peaks and troughs will have been broken and replaced by a falling sequence instead.
Alternatively, if the rate rallies above 1.3685, that could be a bullish sign and might open the way to retesting the 1.40 highs and the monthly pivot.
by Joaquin Monfort, Analytical expert , Forex4You © 2011
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