Tuesday, October 27, 2009

EUR/USD - Key Reversal or just Shake-out

Yesterday EUR/USD had a Key Reversal day taking out 4-day lows and stopped at 1.4844 - right at the Resistance now turned Support derived from the Oct 22-23 Highs(1.4841/43).

The primary Trend channel remains intact and I'm focused on the short term inside channel (Blue lines) that is confining the intermediate trend. Last 3 days reversed just shy of the Resistance price projection around 1.5080.

The question now is if the Key Reversal signals trend change or is just a shakeout of the weak hands. Focus should be first on Support at the 1.4840 level and then on the trend support at the 21-DMA (now at 1.4812).

Next comes the 50% fib of the 1.4479 - 1.5062 move - located at 1.4702. Vigilance and swift reaction are key.

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