Richard Perry
Independent Analyst
Yesterday was a big day on EUR/USD. The selling pressure on the euro has finally told as the rate has fallen to a new 8 month low. Not only that but with a close below $1.3475 a huge head & shoulders top pattern has completed that implies a medium/longer term target of $13000. A two day close below the $1.3475 old support would be preferable but the strength of the pattern looks significant, with all moving averages falling in bearish sequence and momentum in bearish configuration. The daily RSI is now around 30 which is towards where the technical rallies have set in previously so this needs to be kept in mind. The intraday chart shows a minor consolidation has built overnight but no real attempt at a rally yet. There is now overhead resistance initially starting around $1.3500 and up towards $1.3550 before $1.3575 and $1.3600. These are all areas that could see a near term recovery into. It is difficult to go against the selling pressure for the time being, with the implied target from the original double top still at $1.3375. However, Should there be a technical rally, I would not expect it to last for too long before the sellers resume control.
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