Chart (EUR/GBP – 1 Year Trend)
As you can see the Euro has enjoyed significant gains against the Pound in the past year – with all the issues currently facing the European Union now including the recent bearish announcements on Ireland, Poland, Germany (the largest economy in Euroe), Portugal and Spain, we can the Broker trading community provide a giveback in the Euro in the coming investing and trading week.
Chart Analysis: EUR/USD
As you can see the Euro has also made some strong gains against the dollar this past year. Given the state of the US economy and the bearish outlook, one would expect the Forex Brokers to be selling the dollar, however the trend this past week indicates a bearish outlook for the Euro – even with the news and the poor data coming out of the US. The Broker trading community will be continuing their flight from the Euro towards the dollar after the ECB Chairman’s comments – even if the US does not impress those investing and trading in the USD on the Forex with their new stimulus agreement.
After showing hints of a possible recovery on the heels of plunging almost 2000 pips in just over a month, EUR/USD (a daily chart of which is shown) has once again fallen dramatically within the past several days. This occurs after the pair hit a double-test swing high around 1.3330. Currently languishing right above a key uptrend support line extending from the 1.2330 long-term low, any substantial breakdown and close below this dynamic support line should target further support in the 1.2550 region, the last major swing low, on its way potentially to extreme support around the noted 1.2330 long-term low. Any pronounced bounce off the current uptrend support line next week should target intermediate resistance once again in the 1.3300 support/resistance region. The current technical directional bias appears bearish after the news and price action of this week, so any strong break below the uptrend support line should be considered a significant event.
