EURUSD Technical Analysis Update For 24th October 2012

• Euro/dollar made a strong move through the two-day low at 1.3011 and then the 1.3000 round number level earlier today, subsequently dropping to a low of 1.2951 before finding interim support.  This came at a confluence area comprised of the 61.8% Fibonacci retrace and trend line touch as shown on the EURUSD analysis chart below (daily).
• Price is now trading over 150 pips lower than the 1.3138 swing high set on 17/10/2012 as a corrective phase is experienced.  The latest leg lower comes after Moody’s lowered the credit rating of five Spanish regions late on Monday.  Market sentiment is likewise still bearish after the recent weak earnings reports from the US. 
• From a technical perspective we see mixed signals for EURUSD.  The structure analysis perspective (higher lows) gives a mid term upside bias unless price makes a sustained move under the 11/10/2012 low or 1.2800 – 1.2830 support zone.  However, a failure to make a new high above the 1.3171 17/9/2012 swing high could be cause for concern for EURUSD bulls and may mark a range trading scenario roughly between the 1.2800 – 1.3100 levels.  Further to this, the bearish break through 1.3000 also adds downside weight.
• In related markets the Standard & Poor’s 500 Index declined almost 1.5% to 1,413, this marks the lowest seen since September 5th.  We also see that GBPUSD has experienced a continuation of the recent downside trend after breaking below the price support zone between 1.5970 and 1.6000.  Our GBPUSD analysis post yesterday looked for additional volatility on stop orders if this level was broken, this came to be and cable moved as low as 1.5912 today.  EURGBP is finding resistance around 0.8150 and closed marginally lower on the day at 0.8139.
• See our EURUSD weekly update for a look at the longer term levels for the EURUSD.