Euro / US Dollar: Prices Break Channel Support, Signal Short Entry.
The Euro has been trending higher against the US Dollar along with
an overall resurgence in risk appetite since putting in a double bottom
in early March. Prices now look to have established a medium-term top,
putting in a Dark Cloud Cover bearish reversal candlestick formation and
following through with a close below support at the lower boundary of a
rising channel that has guided price action higher since late April. We
will enter short from here, initially targeting the previous swing
bottom below 1.30. Importantly, this will be a "soft" target,
meaning we will look for this to be the next important juncture but
refrain from setting a firm take-profit order at this level, looking for the pair to sink substantially lower to break below the double bottom at
1.2454. A stop-loss will be activated on a daily close above the
06/03/09 wick high at 1.4340.
2009 Al Bawaba (Albawaba.com)
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