By Mohammed Isah of fxtechstrategy.com
: Bear pressure pushed the cross currency pair sharply through its June 2009 low at 0.8399 Tuesday and increased the risk of further declines toward the December 2008 low at 0.8242.
A cut through the latter level would set the stage for more weakness toward the pair's psychological level at 0.8000, where the pair should take a breather on an initial test.
The daily relative strength index is bearish and pointing lower, supporting our view.
On the other hand, on any recovery from current levels, the 0.8421 level that has just been eroded should reverse roles and provide resistance, thus turning the pair lower again.
Further out, the May 28 high at 0.8546 comes in as the next resistance level ahead of its falling trend line at 0.8776.
On the whole, with the pair having violated its key support level at 0.8399, there is risk of further weakness toward 0.8242.
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.