By Mohammed Isah of fxtechstrategy.com
: The currency pair finished a third straight week of losses, pushing decisively through its Jan. 4 low at 0.8936 and opening the door for further declines toward the Dec. 24 low at 0.8733.
to view a chart of the pair.
That swing low is very important for the pair's medium-term technical outlook as a break will resume the declines from the 0.9404 level, the 2009 high, and break the medium-term pattern of higher highs and lows.
If that happens, further downside weakness will target the Oct. 2 low at 0.8567.
The weekly stochastics and relative strength indices are both bearish and pointing lower, suggesting further weakness.
Alternatively, if the pair trades above the 0.9173 level, its Dec. 14 high, our downside view will neutralized and we will expect the pair to retarget its Jan. 14 high at 0.9327 and ultimately its 2009 high at 0.9404.
A move above the latter level will resume the medium-term uptrend that is now on hold, and the pair will target its July 27 high at 0.9592. Having said that, the weight of the evidence is more to the downside than the upside. On the whole, with the pair now under pressure, further downside weakness is expected toward the 0.8733 level and possibly lower.
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Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces
for his subscribers. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.