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eur/usd 4 hour

12/01/2010

eur/usd came to within 25 pips of a 100% extension of its recent down moves before rebounding last night over 100 pips. This move breached the 50% back of the daily move I illustrated Monday but stopped short of the .618 of the same move. This indicates further weakness should be in place.

It is currently playing with the upper boundary of a short term descending wedge. A solid hourly break will indicate a longer rebound. A failure should indicate further weakness.

Currently, the 1.33 area should be of some interest. This is the .382 retracement of the most recent short move. In addition it is a confluence of the 100 day MA and the 200 hr MA. So long as channel support in that area holds (both the short term down channel, and longer term lower boundary of the daily up channel) then I am looking to sell retracements. In addition, RSI doesn’t give entries, but it helps confirm a trend. So long as it continues to make lower lows I will consider the downtrend intact.

Having not traded last night, and missed any potential long entry, I am flat for the day.

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