Forex Investment and Currency Trading

EUR USD - Price is currently locked within a relatively broad/choppy 1.5350 - 1.5900 interweek trading range. Longer term direction will be dictated by the correct interpretation of the current price action.

The first (favoured) interpretation is one of topping behaviour, prior to primary uptrend reversal. Factors which support this view are the recent upside acceleration (potential blow-off trend ending phase) of the primary uptrend, on approach to the 1.6045/1.6365 target zone (Fibonacci projection off the December 2007 reaction low and projected multi-year channel top), with the subsequent choppy price action symptomatic of sharp changes of sentiment (market participants reluctant to hold positions) over relatively short periods of time; coupled with high volume. The alternative read is one of a 1.5350 - 1.5900 consolidation range (continuation pattern), prior to a resumption of the primary uptrend (intact since the .8232 October 2000 low); initial objectives 1.6045/1.6365 then 1.7100. The heavily overbought readings apparent on the monthly momentum indictors, plus the close proximity of significant support/target on the USD Index, support the topping scenario, with a downside resolution of the 1.5350 - 1.5900 range expected to trigger a Q.2/3 2008 decline towards 1.4905 (key support), 1.4285 then 1.3785 (23.6/38.2/50% of the November 2005 - March 2008 advance).