By: Doug Rosen
In my analysis yesterday I stated that this pair will drop and it did. On the weekly time frame price has crossed below the 144 ema, however, I can already see some retracement conditions developing. Price landed on the lower Bollinger band with a lower band pointing up and price bounced.
In addition to that price is now quite a distance from the 5 ema and this is a weekly time frame so that is many pips in between. Of course, due to the recent events based on the Eurozone rescue fund being forced to buy its own debt anything can happen. I won't get too heavy into this matter since I am strictly a technical trader but I must admit this event is what caused yesterday's intense bearish drop. At this time price is hovering around the .8527 zone and this level has proven itself several times in the past as a highly respected price level and has served also a resistance. Price is at a level now where it can just start going back up again or it will breakthrough and just keep tanking.
On the daily time frame price is spaced away from the 5 ema just as it is on the weekly. If it were to head up, it would just go to the 5 or 13 ema, make contact with it then continue downward.
On the 4 hour time frame price is spaced away from the 5 ema as well and it is bouncing off the lower Bollinger band, stochastics is at the bottom of the trade zone pointing up and on top of all that price is also up against last month's low and a trend line. Lots of support in this area.
On the hourly time frame price just bounced off the lower Bollinger band and also bounced up off the weekly M2. I will watch for a retracement back up to the Central Pivot Point at .8550 to see what will happen and I would not consider any shorts for this pair until price rises do a reasonable area of overlapping resistance. Incidentally, the daily central pivot point is at .8548 which is basically the same as the weekly so this could be an ideal area for a short.
