Daily Technical Update
January 19, 2010 (EUR/USD) Test of Support



* Daily: The EUR/USD is about to test the 1.4200 support. The daily chart’s price action shows very aggressive bearish candles after reaching 1.4600. (Refer to Daily Technical Update 1.15.2010 EUR/USD)
* In fact, with the stochastic showing heavy momentum, and not even over sold conditions, the market is hinting this may continue to the 1.40 area in the short-intermediate term.
* 4H: The decline was anticipated, and there was a throwback, but it did not reach the previous support at the 1.4460 area. Instead the correction rally made it to 1.4410 only before a strong bearish candle right ahead of the US session.
* The 4H time-frame shows a possible short-term swing projection to the 1.4180 area(127.0% retracement). This would be considered a break of the 1.42 support for the recent consolidation, but some confirmation would be nice. This would also complete a bullish butterfly, so there’s some bullish forces at this level.
* See if the market can suppress a rally coming out of this possible bullish butterfly formation. Laborious attempts and topping action below the 1.4400 pivot indicates the market may continue further down. The then-short term projection for this decline would be to the 1.4000 area. An intermediate projection is to the 1.37 area (61.8% retracement area in daily).


Fan Yang
Currency Analyst
Commodity Trading Advisor

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