EUR/USD – Sell the Next Pullback

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EUR/USD - Sell the Next Pullback

EUR/USD has been sliding since finding resistance at 1.4666 a couple of weeks ago. Let’s follow up on this pair with a trade idea.

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The daily chart shows that the 1.4666 resistance was in a previous support/resistance pivot area in January/February, suggesting that this is still a bears market. EUR/USD has fallen below 1.10, which crossed many support factors, including a rising trendline, a support/resistance pivot around 1.1060, and the 100-, and 50-day simple moving averages (SMAs). The market in the short-term appears bearish, while the medium-term mode appears to be neutral-bearish.

In this scenario, we can look for a dip towards the 1.0462-1.0520 lows on the year. A more conservative and less bearish target could be the 1.06 handle. But with the current stance of the ECB vs. the FOMC, we should take on a slightly bearish bias.

If we see a very short-term pullback, we can expect resistance below 1.12. In fact a break above 1.12 would take away the bearish bias. In the 4H hart consider looking for resistance when price pulls back towards 1.11 and the RSI back near 60.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.