[Calxy]

EURUSD


• Throughout the past two weeks in particular (an indeed for the whole of this year), there have been of the opinion that the uptrend in EURUSD is still very much in place.
• The risk of this view in the short term is the threat of a ‘double top’ formation at 1.5064 (effectively) with a neckline at 1.4626 (the low from November 3rd).
• There have been a few attempts at a double top formation on EURUSD this year. These near double top formations were not completed and EURUSD instead rallied through resistance levels following brief pullbacks:

o May 13th 2009: EURUSD failed marginally below the resistance level at 1.3737 threatening to form a double top pattern with a neckline at 1.2888. EURUSD corrected down for 4 sessions and then turned back up and rallied through 1.3737to make new trend highs.
o Aug 27th 2009: EURUSD failed marginally below the resistance level at 1.4448 threatening to form a double top pattern with a neckline at 1.4045. The neckline was not tested and instead EURUSD turned back up following a 3-4 day correction down. A week later it was making new trend highs
o Oct 8th 2009: EURUSD stalled marginally below the resistance level at 1.4545 threatening to form a double top pattern with a neckline at 1.4480. The neckline was not tested and instead EURUSD turned back up after 2 sessions and was making new trend highs within a week.

• Now EURUSD has again failed to rally through the resistance level at 1.5064 (SO FAR) and there is the threat of a double top formation with a neckline at 1.4626
• HOWEVER, given the hold of the 55 day moving average, the aggressive rally in Gold (which should test $1,300 and has been a leading indicator for EURUSD since the start of Sept) and stocks holding up in the short term, EURUSD is NOT forming a double top pattern and instead last week’s pullback is likely to be a good platform for a move higher through 1.5064 and up to the resistance level at 1.5285.
• Very near term (intraday) resistance is at 1.4995 which is the 76.4% Fibonacci retracement of the move down from 1.5049. A rally through there would be a very short term bullish development).