Candlestick Daily: Bears Targeting EUR/USD 1.2400 and AUD/USD .9800

Wednesday, May 30, 2012, 7:47 AM

May 30, 2012

CURRENCYCURRENT BIASPOTENTIAL STRATEGY
EUR/USD (Short Term)
Previous support at 1.2500 may now put a ceiling on prices, next support at 1.2400
GBP/USD (Short Term)
Consolidating at 1.5600 round handle, with key support at 1.5500 and resistance expected at 1.5700
USD/JPY (Short Term)
Symmetrical triangle breaks down, leading to a quick drop to 79.00. Watching for potential bounce from this level.
USD/CHF (Short Term)
Inching higher above previous-support-turned-resistance at .9600. See full report for more details.
USD/CAD (Short Term)
Consolidating between bullish trend line and resistance at 1.0300 - waiting to trade until breakout emerges
AUD/USD (Short Term)
Break below .9800 points to more weakness toward 2012 lows at .9700
NZD/USD (Short Term)
2-week range between .7500 and .7675 remains intact, watching for moves toward .7675 to sell. See full report for more details.
EUR/USD (Intraday Forecast)
Potential Strategy
Previous support at 1.2500 may now put a ceiling on prices, next support at 1.2400
What is the trend?Down
What is this pattern?Dark Cloud Cover - See all chart patterns
Why is this significant?A Dark Cloud Cover is formed when one candle opens near the top of the previous candle’s range, but sellers step in and push rates down to close in the lower half of the previous candle’s range. It suggests a potential trend reversal.
What other indicators or Fib Levels support this thesis?
Reason for Strategy

The EUR/USD dropped over the past 24 hours to a new 23-month low amid renewed concerns about the Spanish banking system. The pair formed a Dark Cloud Cover candlestick formation after breaking below the round 1.2500 handle, confirming this previous support area has now become resistance and foreshadowing the early morning drop. For now, the trend remains clearly to the downside and intraday selling opportunities will be favored toward the round 1.2400 handle.

Support & Resistance Levels
Resistance 3tbd
Resistance 21.2646Monthly S3 pivot
Resistance 11.2500Round handle resistance
Current Price1.2448
Support 11.2400Round handle support
Support 2tbd
Support 3tbd

4hr Chart -
4hr Chart -
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