$EURUSD after consolidation

• kevinmhughes
• January 9th, 2010

The $EURUSD has been consolidating since December 20, 2009, but more importantly, the $EUR has been weakening against the $USDX since 12/1/09.  The bear flag (or consolidation) will probably continue for the next couple of days (169 pip range) before a natural break out. [Daily Chart below]

(As I’m writing this post I’m listening to Steven Place on StockTwitsTV talk about the same thing I’m about to talk about)

The 1.4277 level has held as a strong support in the past (Sept & Dec 2008, June & Aug 2009).  With a breakdown below 1.4277 I see the next level for the $EURUSD to be 1.3925 which, of course, has held as great support/resistance levels all the way back to September 2008. Once the $EURUSD hits the 1.3925 level, I will close out 3/4 of my position and wait to see what it does with that level (it’ll probably consolidate).  If the level holds and the $EURUSD bounces back up, I will close the short and reverse into a long position back to the 1.4250 level.  On the other hand, if the 1.3925 level is given up, I will put back the 3/4 I took off and add an additional 1/2 position.

If the bear flag is broken completely and the $EURUSD runs to the upside (above 1.4446), the next level I see is 1.4730.  I will do the same thing on this move as I would have done on a downside move (just on the buy side).  If the 1.4730 level is broke, then I definitely see the 1.5032 being attacked again.

I’m a firm believer that the $USDX ($DX_F) will strengthen over the next several months into and through the summer.  If it does strengthen the way I see/say/hope, we will probably see the mid 1.20′s on the $EURUSD ($EUR weakening, $USDX strengthens) before a significant bounce back (if there is one at all).

There are several economic numbers that will be coming out this week and the calendar that I primarily use is through my FCM (or broker), GFT Forex and you can click here to view it.

This week I talked about the $EURUSD, next week I will talk about the $GBPUSD, all daily charts, with the following weeks talking about the major currency crosses and their levels with my thoughts on the moves they’ll be making.  I am not a swing trader in my business, I am in my IRA and these daily charts are where I get my signals for my IRA account.  My weekly posts will be for intra day levels (specific to each trading session).

Have a GREAT week!

Kevin M. Hughes is the President/Head Trader at K.M. Hughes & Associates, Inc., a currency trading firm, based in Charlotte, NC.  To find out more about his firm or him personally, visit www.hughesincorporated.com

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Tickers: $EUR, $EURUSD, $USD, $USDX

blog comments powered by Disqus