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Short-Term Forex Technical Outlook: EUR/USD (Update)
Tuesday, 25 November 2008 11:14:49 GMT  |  David Song, Currency Analyst
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The EURUSD has held within a broad range between 1.2380-1.3120 during November, and may offer profitable opportunities for forex traders.

Currency Pair: EUR/USD
Chart: 60 Min Charts
Short-Term Bias: Bearish

Analysis Update

EURUSD2_11-25

During the last few hours of trading, we saw the EURUSD move lower but has yet to cross below the 50.0% Fibonacci retracement level. Over the remainder of the trading session, we may see the pair continue to hold between the 50.0% and 61.8% Fibonacci levels, but I expect the euro-dollar to break to the downside over the remainder of the week. The divergence from the 120 SMA suggests that the pair may work its way towards 1.2695 (38.2% Fib level) over the next day or so, and may test the October lows over the near-term as the U.S. dollar continues to reap the benefits of its safe haven status. Meanwhile, the fundamental event risks scheduled for the next 24 hours may call for a change in our outlook.

Analysis

EURUSD1_11-25

The EURUSD has held within a broad range between 1.2380-1.3120 during November, and may offer profitable opportunities for forex traders. After falling to 1.2329 on 10/28, the euro-dollar reached a high of 1.3300 on 10/30, but the lack of momentum to push higher suggests that investors remain bearish against the pair. During the previous trading session, we saw the pair cross above 1.2922 (61.8% Fib level), but triggered an overbought RSI signal in the process, and pulled back to hold near 1.2811 (50.0% Fib level). The divergence from the 120 SMA suggests that the pair will cross back below the 50.0% Fibonacci retracement level over the remainder of the trading session, and may retest the October lows over the near-term. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.

To contact the author of this article, please email: dsong@fxcm.com

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