Forex Trading: EUR/USD Closes Right Above 100Hr Moving Average

The start of 2009 has continued to bring the extraordinary volatility we experienced in 2008, particularly in the latter part of the year. After a EUR/USD rally to close 2008, a seemingly profit taking sell-off brought the pair to the lows seen in yesterday’s session. However, an interesting technical event occurred at the close of the trading day with the pair moving right above the 100 day moving average with a last minute rally. The pair has been unable to hold above that indicator to start the trading day and there seems to be no strong long-term support for the pair above the 10/28/08 lows. Looking at a daily retracement analysis for the pair from the 10/28/08 lows to the 12/18/08 highs we see some retracement levels that could act as support (50% / 61.8%) if the pair were to move toward a full retracement around the 1.23 handle.

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