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(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; 50-period simple moving average in light blue.)
Bullish price action on EUR/USD, a daily chart of which is shown, has just hit a precise one-year high, as Tuesday’s (9/22/2009) high was shy of the high reached a year ago on 9/23/2008 by just a few pips. In the process, price has approached strong historical resistance in the 1.4900-1.4950 price region, which has been respected several times in the past.
Overall, this key currency pair continues to be entrenched in a strong uptrend that has been firmly in place since the March lows. The general directional bias continues to be bullish on this pair, even as downside corrections are expected in the process of reaching for new long-term highs. Any substantial breakout above the 1.4900-1.4950 resistance region would be an exceptionally bullish indication, with a further key upside resistance target in the 1.5280 price region. Within the context of the current uptrend, strong downside support continues to reside in the 1.4450 price region.
By James Chen, chief technical strategist, FX Solutions
