A Promising Opportunity Beyond the Many Seesaw Currency MovesThe euro bulls have been unable to sustain most of Friday’s gains, let alone build on them yesterday. Does it mean the return of range-bound euro, or is there more downside on the immediate horizon?
After Monday’s strong showing of USD/JPY bulls, the same question goes to this pair too. Yet it’s a different pair that has just made us jump into the action with both feet.
EUR/USD moved sharply lower yesterday, invalidating the earlier breakout above the upper border of the blue consolidation. This is a bearish development.
Earlier today, the bulls tried to take the pair higher, but the exchange rate still trades inside the blue consolidation. This suggests that we could see a test of the lower border of the formation and the green horizontal support line in the very near future.
The first thing that catches the eye on the daily chart is yesterday’s fresh August low. The downswing took the exchange rate below the green support zone, the lower line of the declining grey trend channel and the lower border of the declining red trend channel.
The buyers however quickly invalidated all three breakdowns, and the pair swiftly moved to the upside. This upswing closed the Monday’s opening gap, which looks encouraging for the buyers.
Nevertheless, the current position of the daily indicators suggests that one more slide aiming to test the above-mentioned supports can’t be ruled out. This is especially the case when we factor in the bulls being unable to build on yesterday’s huge white candle.
Summing up the Alert, EUR/USD has again reversed lower, and could very well retest its recent lows. USD/JPY bulls’ show of strength has been a one day phenomenon only, and neither the USD/CHF bulls’ action justifies opening long positions. Yet it’s another pair that has just made us take action, and you’re encouraged to read on and find out which. Apart from these, there’re no other opportunities worth acting upon in the currencies.
Forex & Oil Trading Strategist
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