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Chart of the Day - 10/22/2008 - EUR/USD
10/22/2008 – EUR/USD – Drastically bearish price action within the last few days on the EUR/USD (a daily chart of which is shown) has continued the steep downtrend in the pair that has prevailed since the second peak of the long-term double top was reached in mid-July. Currently, the pair has reached a landmark two-year low with no convincing signs of any major near-term reversal. Although oscillators are indicating extremely oversold conditions, extreme oscillator readings such as what we are currently seeing may often be prolonged during strongly trending circumstances. Any continuing downward momentum should eventually target key support around the 1.2450 region, a significant prior support/resistance level. Before that target is potentially reached, however, corrections and/or consolidations within the context of the overall downtrend should provide some respite from the bearish onslaught. James Chen Chief Technical Analyst FX Solutions IMPORTANT NOTICE: These comments are for information purposes only. The information contained on this document does not constitute a solicitation to buy or sell by FX Solutions, LLC., and/or its affiliates, and is not to be available to individuals in a jurisdiction where such availability would be contrary to local regulation or law. Opinions, market data, and recommendations are subject to change at any time. Forex trading involves substantial risk of loss and is not suitable for all investors. (Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend line in green; downtrend line in red; horizontal support/resistance levels in yellow; 50-period simple moving average in light blue.)
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