Support Area for EUR/USD

06/02/2010 12:01 am EST

Focus: FOREX

James Chen

Chief Technical Strategist, FX Solutions

Price action on EUR/USD, a daily chart of which is shown, has once again descended as of the Tuesday morning New York session. 

Click to Enlarge

(Price on first pane, Slow Stochastics on second pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)

Today’s drop tentatively broke down below the prior 1.2140 short-term support, establishing yet another new four-year low for the pair around the 1.2110 price region. This occurs within a continuing strong and steep downtrend. At the current juncture, although technically within a short-term consolidation, price appears to be steadily pushing its way down toward its key 1.2000 support target.

Any further subsequent breakdown below 1.2000 within the context of the confirmed downtrend continuation could potentially target further downside in the 1.1800 support price region.

By James Chen, chief technical strategist,
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