By Mohammed Isah of fxtechstrategy.com
: This currency pair declined further in early morning trading Tuesday, reversing Monday's marginal gains.
As we wrote in our previous analysis, the pair remains biased to the downside and should head lower toward 0.8936, its Jan. 4 low.
A loss there would turn attention toward the Oct. 1 high at 0.8857 and then the Dec. 24 low at 0.8733. A decisive break of the latter level will cause the pair to resume its short-term declines toward the Oct. 2 low at 0.8567.
The pair's daily stochastics remain supportive of this view.
In order for the pair to reverse its current weakness, it must close back above the 0.9173 level. A firm hold above there would pave the way for a move toward the Jan. 14 high at 0.9327 and then the 2009 high at 0.9404.
A move above the latter level is required for a resumption of the pair's medium-term upward trend, which has been on hold since Nov. 16. If the pair resumes that trend, it could target its July 27, 2008 high at 0.9592.
Overall, however, risk remains for a decline toward 0.8936 and then 0.8733.
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.