Thursday, 27 September 2012

EURUSD breaking downward trendline

EURUSD is showing signs of trend reversal. It has first found support at the upward green trend line and is now breaking the red downward sloping trend line. The structure of the decline looks corrective as the overlapping pattern is not a characteristic of impulsive waves.

Our most possible path to follow now is upwards towards 1,30 at first. The pair has just moved above the resistance  and must stay above it in order for the upward move to continue. The rise from 1,2829 lows looks impulsive and this could develop into something bigger if we look at the bigger picture as depicted on the first chart. A pull back towards 1,2870-90 could be possible if the first upward wave has finished at 1,2928.

As always the structure of each move is important to determine whether it is corrective or impulsive.

Concluding, today we may have seen an important bottom in EURUSD. We are in favour of long positions with risk limited to today's low.

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