By Russell Glaser – A technical analysis of the 4-hour EUR/USD shows that over the past 28 hours, the pair has been trading in a bearish channel.
We can use the new high from Friday’s trading session as the upper limit of the channel and the old trend line that has been broken as the lower border of the channel. Both lines begin on January 26th (not shown).
We can see the price made contact with the upper line twice; once at the origination and the second time today at near 8:00am GMT. The price has also made contact with the previous trend line twice, failing to significantly breach this support level.
Previously broken trend lines should not be forgotten. They can be used in the future as support and resistance lines in the new trend.
We can also see a declining slope on the MACD histogram, indicating a weakening short term uptrend.
Traders may want to initiate buy positions from sell positions from the upper border of the channel with limit orders to take profit at the lower border of the channel.
Major resistance and support lines have been marked at 1.3680 (Feb 26th high) and 1.3470 (Feb 25th low).
Forex Market Analysis provided by Forex Yard.
© 2006 by FxYard Ltd
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