8-12-08
22:38 GMT – The daily charts are showing a possible bullish reversal doji above previous strong weekly resistance at 1.4850. Also the RSI is very oversold at a below 20 level (below 30 is classically considered oversold) on the daily charts as well. I think the overall trend with pair is down right now but we might see a rise to the trend line resistance (red line below) as traders take profits on their shorts and consolidate gains made on the dollar’s rise.
Trading Idea: Aggressive traders might enter now with a stop below the bottom of the doji while conservative traders would probably wait for the close of the next candlestick to give further direction for the pair (a close above 1.4942, the previous candle’s open would be a very bearish signal). Long targets include 1.5025, 1.5150 and 1.5200. Caution is advised however as the overall trend is down in the mid-term so a long trade would be against the mid-term trend.
(click to enlarge)
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