Forex Video Briefing 7/10 – Bearish Continuation in Euro-Crosses
The EUR/USD rallied after the FOMC meeting minutes yesterday. However, it stalled at the 1.3640-50 resistance area. The 4H chart has a slew of bearish clues. The rally to 1.37 is seen as a clear-out. Some would even say a head and shoulders is forming. It is not one in the conventional sense, but does provide a clear-out which strengthens the bearish case, especially because the prevailing mode in the 4H chart was bearish. Today’s price action also respected a rising trendline support that is now acting as resistance. The daily chart also show bearish clues in the form of the MA-crossover and respect of the MAs as resistance. This sets up for a what’s called a bearish sling-shot. Today’s candlestick also looks like a bearish engulfing candle or outside bar. Also the RSI has been held below 60, showing maintenance of the bearish momentum since establishing a double top. The bearish signs from both technical and fundamental perspective suggests EUR/USD is poised to test the 2014-lows in the 1.3475-1.3505 area.
The EUR/GBP has been bearish throughout the year, in a bearish trend that goes back to at least high of 0.8770 in mid 2013. The moving averages reflect a bearish trend that is still developing (they are in bearish alignment, sloping down, and are spreading apart). Today’s daily candle is potentially going to be an bearish engulfing candle or outside bar, with price respecting a previous support of 0.7960 as resistance. The 4H chart shows price pushing below a mini-consolidation trendline. The RSI is staying below 60. These signs point to a market that has maintained its bearish momentum, and is ready for bearish continuation. The 2012 low at 0.7764 could be in sight.
The EUR/JPY also is in bearish continuation. The 4H chart shows a slingshot from the moving averages sending the pair below a recent consolidation trendline as well as to new lows below the June-July consolidation area. The daily chart also shows the moving-average sling-shot. The RSI is also holding below 60, showing maintenance of bearish momentum. The bearish outlook has the 2014-low at 136.22 in sight.