Here you can see the Euro-US Dollar (eur-usd) 240 mins chart. As i posted last week, after the huge rally, the pair came in for resistance at the crucial .382 retracement of the whole down move from 1.6 in July 2008. After multiple attempts to get past the resistance over 2-3 days, price started correcting downwards in a parallel channel, finally breaking through on Friday with a sharp fall along with the correction in equity markets. Its moved off just above the 50% retracement level of this upmove near 1.31, having almost filled in the gap created a couple of weeks back by the huge 400 pips bar after the Federal Reserve announce their treasure buyback plan.
The pair has now reached back near the bottom line of the channel & all those who could not get in on the downmove earlier now have an opportunity to do so. The market will be weak coming forth, equities will slowly give up some of their gains of the past month, and the major high yielders are all expected to give up some of their gains to. Infact this could also be high for this leg of the rally, and euro and pound and others might continue the long term downmove they started in July ‘08.