FX.co ★ EUR/USD candlestick analysis for January 24, 2011

Earlier on a 4-hour graph the EUR/USD currency pair has formed candlestick combination Dark Cloud Cover, indicating downside movement.
This combination of candlesticks shows that the pair had been advancing for several weeks. However, the bears started to increase their influence near the resistance level 1.3650, which is a 2-month high, and a rebound took place.
The downside movement is supported by the MACD divergence and the RSI.
The breakthrough of the Fibonacci correction level 23.6 will prove this viewpoint. In this case a downside movement to the support level 1.3250, where the Fibonacci correction level 50.0 is also located, should be expected.
On the other hand, if the resistance level 1.3650 is broken, short positions should be closed as it will result in growth to 1.3786.