Business-Insider

1/15/2008 – EUR/USD – As of this writing, the big news on the EUR/USD, of course, is that price has just approached the all-time historical high in the pair. In fact, as shown on the displayed EUR/USD daily chart, an approximate double-test occurred on the Monday and Tuesday price bars that came as close as 40 pips from the all-time high. In addition, as it stands now, a rough inverted head-and-shoulders pattern has formed, and is highlighted on the chart by the large yellow oval. As price is currently right on top of an extremely important support/resistance zone, the question, as always, is where the pair is heading. From a purely technical standpoint, since price action has performed a double-test at the extreme and oscillators are pointing down from extremely overbought, some signs are indicating as of this writing that an upmove failure may have occurred. On the other hand, the inverted head-and-shoulders formation is hard to ignore, and may point towards a possible impending break of the all-time high. Price action within the next few days will provide further direction, and Chart-of-the-Day will revisit this crucial pair if and when any directional triggers occur.

James Chen
Chief Technical Analyst
FX Solutions

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(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance lines in yellow; 200-period simple moving average in light blue)

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