May 13, 2013 – EUR/USD (daily chart) has stalled its decline just under the key 1.3000 support/resistance level, which also currently happens to reside around the important 200-day moving average. The current decline occurs after a bullish correction that brought price up in the beginning of the month to hit the 50% Fibonacci retracement level (around 1.3240) of the prior bearish trend from the 1.3700-area high in early February to the 1.2750-area low in late March and early April. The subsequent decline from the 50% level formed a rough head-and-shoulders reversal pattern that broke down late last week to arrive at its current position below 1.3000 support.
Having reached down to the 200-day moving average in the process, price is at a critical juncture. Further declines below 1.3000 and the moving average should target a re-test of the support lows around 1.2750-1.2800, with a further major downside objective around the 1.2650 level, to potentially continue the entrenched downtrend.
James Chen, CMT
Chief Technical Strategist
City Index Group
Forex trading involves a substantial risk of loss and is not suitable for all investors. This information is being provided only for general market commentary and does not constitute investment trading advice. These materials are not intended as an offer or solicitation with respect to the purchase or sale of any financial instrument and should not be used as the basis for any investment decision.
Share
