EURUSD - Monthly long-term Overview

Euro-Dollar is slowly falling inside a descending channel on monthly charts. There is a resistance area below the upper trend line between 1.4195 and 1.4270, which if broken to the upside would lead to next area of resistance between 1.4310 and 1.4360. A pull-back to the 50% Fibonacci retracement would bring us down to around 1.3370 which would retest the break of the previous weekly up-swing. On this time-frame, we are however inside an ascending channel which could easily lead us to the upper trend line and reach psychological level of 1.4500.

On Daily charts, a top seems to have formed and the pair is falling but still would have to break 1.3690-1.3770 area of support (about 25% retracement) if we are to expect it to retest the broken resistance further down at 1.3370. This level has held both ways, as resistance on middle-March, and as support last week on October 12. Short-term the pair looks bearish but I would expect a propulsion back up after the retracement and retest, targeting the last weekly highs at around 1.5150 with a series of intermediate target levels at 1.4660 and 1.5000 which is a strong psychological level.

Daily assessment on Friday October 15, 2010 – at market’s close.

EURUSD	RES2	RES1	SUP 1	SUP 2	R/R	FORECAST	PRICE ACTION
Monthly	1.6039	1.4592	1.1324	0.9302	1:3	Bearish	Descending channel
Weekly	1.5146	1.3817	1.2846	1.1957	1:3	Bullish	Ascending channel
Daily	1.4158	1.4030	1.3497	1.1878	1:3	Bearish	Two consecutive doji