By Russell Glaser – A sign that the bearish streak of the EUR/USD may begin to slow is appearing on the daily chart from the Relative Strength Index.
Below the Forex Technical Analysis shows the daily chart using the 10-day RSI. The RSI can be used to show a shift in the direction of the price trend. The 10 day setting is used as it takes into account 2 full weeks of trading data (5 days in a trading week).
By drawing a trend line underneath the rising RSI line, we can see that a break of the rising RSI line provided a good signal for previous price breakout that occurred on March 17th. By drawing a tend line above the downward sloping RSI line, we can see a possible end to the downward sloping price trend as the trend line on the RSI is on the verge of being broken.
While a break of the trend line may not present a signal to buy as when the RSI breaks above the 30 line (as the RSI is typically used) this can be a signal to close any short positions and take profits.
Forex Market Analysis provided by Forex Yard.
© 2006 by FxYard Ltd
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