(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend line in green; downtrend line in red; chart pattern in magenta; Fibonacci retracements in grey; 50-period simple moving average in light blue.)

12/30/2008 – EUR/USD – A couple of days before 2009, erratic price action on the EUR/USD daily chart, as shown, continues to waver in a sideways consolidation. This trading range has been in effect for the past week after price pulled back to a key 38.2% Fibonacci retracement level within the current uptrend. Whether this price action represents simply an uptrend pullback or the beginnings of a bonafide bearish reversal remains to be seen.

Early 2009 should provide much stronger guidance for this major pair. A substantial break above the 1.4700 level should tag the current retracement as merely a normal pullback within the context of a strong, continuing uptrend. Conversely, a significant drop below the 1.3800 region could signify that the current retracement represents the beginnings of a downside reversal, which could potentially mean that dollar recovery may be the new direction to start off the new year. Happy New Year!

James Chen

Chief Technical Strategist, FX Solutions

To download the latest version of FX AccuCharts 7.1, please click here: Download FX AccuCharts 7.1

*IMPORTANT NOTICE: These comments are for information purposes only. The information contained on this document does not constitute a solicitation to buy or sell by FX Solutions, LLC., and/or its affiliates, and is not to be available to individuals in a jurisdiction where such availability would be contrary to local regulation or law. Opinions, market data, and recommendations are subject to change at any time. Forex trading involves substantial risk of loss and is not suitable for all investors. Click here for more information.

(Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; downtrend line in red; horizontal support/resistance line in yellow; Fibonacci retracements in grey; 50-period simple moving average in light blue.)

12/29/2008 – USD/JPY – Within the context of a continuing downtrend on the USD/JPY (a daily chart of which is shown), price action approaching the New Year has made a pullback retracement back up near a key downtrend resistance line (in red). This retracement reached a major support/resistance level around 91.00 (in yellow) before retreating, and now looks poised to continue its well-entrenched downtrend.

Of course, a downtrend continuation would not be confirmed unless a subsequent breakdown below the 87.00 level occurs, which represents the last swing low within the downtrend. Therefore, the 87.00 region signifies major support to the downside.

In the event of a strong break back up above the 91.00 region going into the New Year, which would also represent a break above the downtrend resistance line, price could target further major resistance in the 93.50 region.

James Chen

Chief Technical Strategist, FX Solutions

To download the latest version of FX AccuCharts 7.1, please click here: Download FX AccuCharts 7.1

*IMPORTANT NOTICE: These comments are for information purposes only. The information contained on this document does not constitute a solicitation to buy or sell by FX Solutions, LLC., and/or its affiliates, and is not to be available to individuals in a jurisdiction where such availability would be contrary to local regulation or law. Opinions, market data, and recommendations are subject to change at any time. Forex trading involves substantial risk of loss and is not suitable for all investors. Click here for more information.

(Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; downtrend line in red; horizontal support/resistance lines in yellow; Fibonacci retracements in grey; 50-period simple moving average in light blue.)

12/23/2008 – USD/CHF – After plummeting more than 1,800 pips since early December, price action on the USD/CHF (a daily chart of which is shown) corrected to the 38.2% Fibonacci retracement level, and then has dropped back down substantially within the past couple of days. From a technical perspective, this appears very much like a classic 38.2% pullback within an overall downtrend.

Of course, a continuation of the downtrend would not be confirmed unless price actually broke below the 1.0400 price region, which is the approximate level of the last extreme low (the bottom of the 1800-pip plummet). Therefore, 1.0400 should act as major support to the downside, with the 1.0700 region as intermediate support. In the event of an impending bounce back up within the context of a holiday consolidation, price should meet resistance in the 1.1130 region, the level of the 38.2% swing high retracement.

James Chen

Chief Technical Strategist, FX Solutions

To download the latest version of FX AccuCharts 7.1, please click here: Download FX AccuCharts 7.1

*IMPORTANT NOTICE: These comments are for information purposes only. The information contained on this document does not constitute a solicitation to buy or sell by FX Solutions, LLC., and/or its affiliates, and is not to be available to individuals in a jurisdiction where such availability would be contrary to local regulation or law. Opinions, market data, and recommendations are subject to change at any time. Forex trading involves substantial risk of loss and is not suitable for all investors. Click here for more information.

(Price on 1st pane, Slow Stochastics on 2nd pane; downtrend line in red; horizontal support/resistance lines in yellow; chart pattern in magenta; Fibonacci retracements in grey; 50-period simple moving average in light blue.)

12/22/2008 – EUR/USD – Within the context of the remarkable bullish run of the past couple of weeks, price action on EUR/USD (a daily chart of which is shown) has retraced to a significant support/resistance level. This level is supported by a key prior S/R zone around 1.3830-1.3880 region.

It is also supported by an important 38.2% Fibonacci retracement level (the low-to-high retracement span being measured from the low on 12/4/2008 to the high reached just last week on 12/18/2008). A strong break below this significant support level could target further support around the 1.3650 level, which coincides with a 50% retracement of the recent bullish run. Any clear bounce off the current support level could target further resistance in the 1.4300 region.

James Chen

Chief Technical Strategist, FX Solutions

To download the latest version of FX AccuCharts 7.1, please click here: Download FX AccuCharts 7.1

*IMPORTANT NOTICE: These comments are for information purposes only. The information contained on this document does not constitute a solicitation to buy or sell by FX Solutions, LLC., and/or its affiliates, and is not to be available to individuals in a jurisdiction where such availability would be contrary to local regulation or law. Opinions, market data, and recommendations are subject to change at any time. Forex trading involves substantial risk of loss and is not suitable for all investors. Click here for more information.