EUR/USD Daily Chart
10/03/2008 3:29 pm EST
(Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; horizontal support/resistance levels in yellow; 50-period simple moving average in light blue.)
Extremely bearish price action on the EUR/USD daily chart, as shown, has plunged a total of more than 1000 pips since the latest bear run began on September 23. The current drop has essentially been unidirectional, with little in the way of retracement or consolidation. This drastic plummet is reminiscent of the large drops that began in late July and late August.
As of Thursday morning (New York session), price has broken down below the last support level at 1.3880, which suggests that the overall downtrend of the last three months could still be in full force. Continued general bearish price action, even if minor retracements and/or consolidation enter into the picture, could target further key support around the 1.3550 region.
By James Chen, Chief Technical Analyst, FX Solutions