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Forex Analysis: EUR/USD Falls to New 8-Week Low

EUR/USD Daily Chart

EUR/USD (daily chart) as of November 5, 2012 has continued its bearish move off the key 1.3000 resistance level that was reached mid-week last week. This drop from 1.3000, which has now established a new 8-week low for EUR/USD, follows a breakdown of a bullish support trend line extending back to the July 1.2040 2-year low. Price has now dropped further off that trend line break to break down tentatively below the important 1.2800 support region, which was also around the level of the 200-day moving average. If price is able to stay below the key 1.2800 level, this bearish breakdown could further its downside bias towards potential support around the 1.2600 price region. Any move approaching this lower level could seek a continuation of the long-term bearish trend that has been in place since the May 2011 1.4935 high.

James Chen, CMT
Chief Technical Strategist
FX Solutions

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James Chen

James Chen

James Chen is Chief Technical Strategist for City Index Group. He is also a Chartered Market Technician. He is the author of the books: "Essentials of Foreign Exchange Trading" (John Wiley & Sons, 2009) and "Essentials of Technical Analysis for Financial Markets" (John Wiley & Sons, 2010). Mr. Chen writes currency analysis, leads forex trading seminars and has appeared in numerous major financial media outlets, including CNBC, Bloomberg TV, Forbes, Reuters, Dow Jones, and the Associated Press.