EURUSD: Violates The 1.4625 Level & Targets Further Downside.
EURUSD: As referenced in our analyses since the beginning of the week of the vulnerability of the pair to follow through lower especially when a second shooting star candle pattern was printed on the weekly chart. That has occurred with the pair holding firmly below its violated longer term rising trendline and breaking below its strong support at the 1.4625 level on Friday. While we still view this break with caution, a firm hold below the 1.4625 level followed with further downside losses possibly towards its Oct 02’09 low at 1.4479 will neutralize that concern and create further downside scope. Another implication of the violation of the 1.4625 level is the break of its pattern of higher highs and higher lows which has halted its medium term uptrend and turned focus to the downside. The risk to this analysis will be a break back above the 1.4625 level with further strength if seen pushing the pair higher towards the 1.4799 level, its Nov 20’09 high where a reversal of roles is expected to occur and turn the pair back down again. Further out, resistance is seen at its Dec 07’09 high at 1.4903 and then its YTD high at 1.5143. Overall, with its important swing low at the 1.4625 level violated, risk has turned to the downside with attention on further lower prices.
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