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EUR/USD under what appears to be extreme pressure

Written February 5, 2010 at 1:49 PM EST by Shawn Powell 

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eur-d-feb5_2010

In what can only be described as extreme, the EUR/USD has fallen heavily over the past few days of trading. After breaking cleanly below the 50% retracement level yesterday at 1.3800, the pair has continued its run to the downside. The EUR/USD is now within sight of the 61.8% Fibonacci level at 1.3483.

eur-5-feb5_2010

This does not mean that traders should enter a short trade at this time, however, with that said, now would be a good time to start finding an area of support where the pair will rest over the weekend. Returning to action on Sunday eveing/Monday morning, the EUR/USD will be challenged by this new support level and will likely present fresh trading opportunities. Looking at the 5 minute chart there are two support levels forming between the 1.3595 level and 1.3585 on the bottom. This could be considered one area of support.

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6 Responses to “EUR/USD under what appears to be extreme pressure”

  1. Mani on February 6th, 2010 2:00 pm

    Greg,

    Short term upside is what i am expecting in euro/usd after hitting a low of 1.4585 on friday after NFP.

    Almost a vertical down line i am seeing on 4 hr euro/usd chart from 1.4025 ( 450 pips ) without a retracement.

    What are the resistance levels to consider for sunday night and monday?

    Thanks.

  2. anh quach on February 7th, 2010 12:55 pm

    Please tell me the number in to 2 MA for Chart m5 Green and blue ( Chart study on feb 5 .I always use number 8 for blue and number 20 for green but It is not correct
    and tell me what number for 2 line MA ,if I use H1 and daily chart
    Thanksj

  3. Greg Michalowski on February 8th, 2010 7:34 am

    The Blue line is 100 Simple Moving Average. The Green line is the 200 bar Simple Moving Average. Both are set on the Closing value.

    Greg

  4. Sameer on February 9th, 2010 10:36 am

    Hey Shawn,

    Just I want to know how you give such judgement that the support levels forming between the 1.3595 level and 1.3585 on the bottom are the real support which will rebound it. it is right one

    Thank you

  5. Shawn Powell on February 9th, 2010 11:34 am

    Hi Sameer,

    There was a pause after an agressive move down. Double bottoms are often a sign for traders with short positions (selling) to take profits. The level acted as an area to lean against. Traders will typically look for low risk trade opportunities with tight stops when these types of situations develop. This was one of them…

    Thanks

    Shawn P.
    FXDD

  6. Sameer on February 9th, 2010 2:37 pm

    Thank You,Shawn for this new idea which I get about the ‘W’ I will reverse it to know the opposite situation when the ‘M’ forms

    We can call it an area which the price are surrounded between the two opposite powers of the market: the long and the short

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