Observation on the EURUSD Pair up to 06-23-2008

The EURUSD is very near a decision point with a bias to the upside. The weekly graph of the pair will tell you why:

1. The 1.55 area (1 black) is where you can find a conversion of many interesting lines: A blue ascending channel middle line, a brown ascending channel middle line, the lower boundary of the steep yellow ascending channel and a support line in green.
   
   
2. The RSI and STOC are in a setup that usually was ended by a move up. Look how all the previous rectangles have an RSI approaching the 50 line and reversing when the STOC did move under and reversed before hand.
   
   
3. The MACD histogram is in an oversold situation that should stabilize and reverse soon. The values in the histogram are lower than any we can see in all of the chart period (under the red line).
   
   
4. The price action has the characteristics of a converging triangle (black line and green support) which is a consolidation pattern. The price usually exits in the direction of the entry, in this case up.

Conclusion:

We should see a new move up in the pair. It is in a consolidation and at a conversion of many important lines. The momentum indicators are pointing to a better possibility for a move up. The possible targets are a point on the last channel in effect (yellow channel - upper 2 black) or in case we are wrong and we get a move down, where the price found a previous support in conversion with a trend line (lower 2 black).

Disclaimer

By no means do any part of this article recommends, advocates or urges the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author and his company express personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this article. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results. The content of this article was created with the best known data at the time. The writer and his company are not responsible for the accuracy or completeness of the mentioned data. The writer is not a registered consultant of any kind and so the reader should not see any single part or the whole analysis as an advice for any kind of action in the financial markets.
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About the Author

Moshe Shalom Head of Technical Analysis Department ForexManage Ltd Site: www.forexmanage.com Email: This email address is being protected from spam bots, you need Javascript enabled to view it