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Chart of the Day - 12/30/2008 - EUR/USD
12/30/2008 – EUR/USD – A couple of days before 2009, erratic price action on the EUR/USD daily chart, as shown, continues to waver in a sideways consolidation. This trading range has been in effect for the past week after price pulled back to a key 38.2% Fibonacci retracement level within the current uptrend. Whether this price action represents simply an uptrend pullback or the beginnings of a bonafide bearish reversal remains to be seen. Early 2009 should provide much stronger guidance for this major pair. A substantial break above the 1.4700 level should tag the current retracement as merely a normal pullback within the context of a strong, continuing uptrend. Conversely, a significant drop below the 1.3800 region could signify that the current retracement represents the beginnings of a downside reversal, which could potentially mean that dollar recovery may be the new direction to start off the new year. Happy New Year! James Chen Chief Technical Strategist 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; horizontal support/resistance levels in yellow; uptrend line in green; downtrend line in red; chart pattern in magenta; Fibonacci retracements in grey; 50-period simple moving average in light blue.)
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