Best Financial Markets Analysis Article In the FX Specialist Guide we had pointed out a Key Reversal Week that potentially boded bad for bulls. We still believe this to be the case and signs begin to emerge on the Daily chart that back this up.

The FX Specialists view

WEEKLY CHART:

Key Reversal Weeks tend to be more reliable than key reversal days, and we saw one of the former recently in AUD.

The current risk is to the downside.

On this chart note the first interesting support/target is around 0.8600, the 23.6% retracement

DAILY CHART:

We have now seen a failure of the shorter term bull channel support today.

The confirming signal would be a close below the 0.8905 02-Nov low.

In the Guide we had already noted a negative RSI divergence that was heralding bull fatigue.

Note lower support coming from the slightly longer term bull channel base at 0.8760 currently, ahead of that 0.8600 23.6% pullback level.

In the Guide we had suggested sales, on the back of that Key Reversal Week, into 0.9300/20. Those now short will now favour lowering stops to 0.9325, targeting 0.8925 for partial profits. Balances may seek to close nearer to 0.8600 – we’ll review this in due course.

Note: A recent Key Reversal Week seen in EUR/USD was not considered a strong example of one – and this week it was negated. However, there has been fresh failure close to a long term 76.4% level, and a close below the 1.4800 level today would produce a fresh, perhaps more reliable, key reversal week. We’ll see.

Mark Sturdy
John Lewis

Seven Days Ahead
Be sure to sign up for and receive these articles automatically at Market Updates

Mark Sturdy, John Lewis & Philip Allwright, write exclusively for Seven Days Ahead a regulated financial advisor selling professional-level technical and macro analysis and high-performing trade recommendations with detailed risk control for banks, hedge funds, and expert private investors around the world. Check out our subscriptions.

© 2009 Copyright Seven Days Ahead - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Seven Days Ahead Archive

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.