EURUSD Short to daily TL 19JAN09 (click to see chart)- After the EURUSD bounced off the 200 SMA on the 1 hour it has been on a tear downward. Where will it stop? I think it if makes it beyond the S1 pivot at 1.2950 area it will try to go for the long term trendline that is crossing around 1.2800 area. There is the risk of a reversal to the 62, but innaugauration mania may give us a push down. What is interesting is that the TL is now between S2 and S3 so it is well with statistical probabilities to hit this area in the European session if current sentiment holds. This pair does not usually go down to S3 or below.
Take a look at the 60M chart here:
UPDATE as of Wednesday 21JAN09 – the pair hit the long term base trend line dead on and then retraced. I did not take all of this as I was afraid of a reversal but did collect a nice amount of pips on the bottom part of this trade. I still think we may go lower on fundamentals but this pair has been tough for me to trade as its volatility range has increased significantly from what I am used to. I am watching, but just taking a few short range trades in the direction of the current trend. If it breaks the long term base line I would consider a testing possition, I would also be willing to go long if it broke strongly above the 62 on the 1 hour.
Chart as of Wednesday 21JAN09 20:00