Euro Support Holding for Now
Prepared by Jamie Saettele, CMT
I wrote yesterday about “the disparity index – a measure of the distance between the closing price and the 200 day moving average on a percentage basis. Major tops since 2008 have occurred just above 9% (price exceeding its 200 day MA by 9%). Like all momentum indicators, the disparity index tends to display divergence at its final top. Without divergence present, I am wary of calling this the final top. What’s more, the 100% extension at 15279 intersects with channel resistance in mid June. The November 2010 top at 14280 is support but 14150 is a near term objective. This level is defined by the 4/18 low and 100% extension of the 14940-14509 decline.” Little has changed since yesterday other than the doji closing. Any bounce from would see resistance at 14500 and 14678 (61.8%) but the inability of the EURUSD to bounce in the face of a snapback in the metals, crude, and stocks suggests that this market is weak. Additional weakness targets 14150.
Support/Resistance Index (M,W,D) – (2), (2), (1)
Jamie Saettele publishes Daily Technicals every weekday morning, COT analysis (published Monday), technical analysis of currency crosseson Wednesday and Friday (Euro and Yen crosses), and intraday trading strategy as market action dictates at the DailyFX Forex Stream. A graduate of Bucknell University, he holds the Chartered Market Technician (CMT) designation from the Market Technician Association. He is the author of Sentiment in the Forex Market. Send requests to receive his reports via email to email@example.com.
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