We are bearish the EUR right now...
The EUR/USD, as you can see, has been trading south for the past three days, down from Monday’s high at 1.0905. Yesterday’s decline aggressively swallowed both the H4 demand at 1.0705-1.0723 (now acting resistance area) and the 1.07 handle, potentially opening up the path south down to a H4 demand fixed at 1.0607-1.0632.
Over on the bigger picture, we can see that a daily support area at 1.0714-1.0683 (now acting resistance area) was also taken out during yesterday’s bearish assault. According to the weekly timeframe, the next downside target does not come into view until the 2017 yearly opening level at 1.0515/support area at 1.0333-1.0502.
Our suggestions: To our way of seeing things, the pair reflects a strong bearish stance at present. On that account, our desk will be watching for H4 price to retest the 1.0705-1.0723/1.07 neighborhood as resistance today. Assuming this comes to fruition, and the pair chalks up a reasonably sized H4 bearish candle from this area, a short with a target objective set at the H4 demand drawn from 1.0607-1.0632 could be an option (as per the black arrows).
Should the above setup come into view today, it may be worth noting that there is also a daily demand seen just below at 1.0599-1.0650. Therefore, once price crosses paths with the 1.0650 level (the top edge of this zone), you may want to think about reducing risk to breakeven!
Data points to consider: German retail sales at 7am, German unemployment change at 8.55am, EUR CPI flash estimate at 10am. US Core PCE data at 1.30pm, FOMC Dudley speaks at 2pm as well as FOMC member Kashkari speaking at 3pm GMT.
Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: 1.0705-1.0723/1.07 (watch for a reasonably sized H4 bearish candle to form from here before pulling the trigger, stop loss: ideally beyond the rejection candle’s wick).
Over on the bigger picture, we can see that a daily support area at 1.0714-1.0683 (now acting resistance area) was also taken out during yesterday’s bearish assault. According to the weekly timeframe, the next downside target does not come into view until the 2017 yearly opening level at 1.0515/support area at 1.0333-1.0502.
Our suggestions: To our way of seeing things, the pair reflects a strong bearish stance at present. On that account, our desk will be watching for H4 price to retest the 1.0705-1.0723/1.07 neighborhood as resistance today. Assuming this comes to fruition, and the pair chalks up a reasonably sized H4 bearish candle from this area, a short with a target objective set at the H4 demand drawn from 1.0607-1.0632 could be an option (as per the black arrows).
Should the above setup come into view today, it may be worth noting that there is also a daily demand seen just below at 1.0599-1.0650. Therefore, once price crosses paths with the 1.0650 level (the top edge of this zone), you may want to think about reducing risk to breakeven!
Data points to consider: German retail sales at 7am, German unemployment change at 8.55am, EUR CPI flash estimate at 10am. US Core PCE data at 1.30pm, FOMC Dudley speaks at 2pm as well as FOMC member Kashkari speaking at 3pm GMT.
Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: 1.0705-1.0723/1.07 (watch for a reasonably sized H4 bearish candle to form from here before pulling the trigger, stop loss: ideally beyond the rejection candle’s wick).
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