The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (
) -- The euro-dollar currency pair (EUR-USD) remains vulnerable to the downside after its selloff on Friday reversed much of the week's gains.
The pair had halted its corrective weakness. Despite Friday's selloff, it still managed to close this week marginally higher vs. last week.
In the wake of Friday's selloff, the pair could breach the 1.4046 level, its May 16, 2011 low. If that happens, EUR-USD should see further weakness toward its March 28 low at 1.4020 and then the 1.4000 psychological level.
Further down, the 1.3852 level comes in as the next downside target.
The euro-dollar's weekly stochastics are bearish and pointing lower, suggesting further weakness.
Alternatively, if the pair can violate 1.4339 and then 1.4422, it should see further strength toward the May 6 high at 1.4586 and ultimately the 2011 high at 1.4938.
All in all, the euro-dollar currency pair remains vulnerable to the downside in the near term even though it has been attempting a recovery.
--Written by Mohammed Isah.
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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.