Euro reverses

Evening all,

While equity charts are put on hold here, I have some words on the EUR/USD currency pair.

In previous posts on the EURUSD, I leaned towards the bullish side because of chart patterns. You can search for previous posts here on it. As those following the currency markets will know, the EURUSD put in a couple of massive red candles, just as the US Dollar shot up. I have been building up a short position on this currency pair ever since it broke out of a consolidation at 1.4000 – 1.4500. That was coupled with a critical break of the 200-day moving average. The latest pattern I see on the chart is a confirmed bear flag. So I will be looking for even more downside in the EURUSD.

I noticed the EURUSD had trouble at about the 1.3380 region (see purple circles). Next, I drew fibonacci retracement levels and what happened? 1.3380 happened to be the 50% retracement from 2010/2011 highs. So from here, I deduce an important support level of 1.3380 – which is where we are now in EURUSD. A bear flag right before an important support level is not ideal at all, so I will be watching the EURUSD intently in the days ahead, with the expectation that it will break through this horizontal support line. Once it break through, I do not see why the EURUSD cannot hit 1.3000.

All analyses, recommendations, discussions and other information herein are published for general information. Readers should not rely solely on the information published on this blog and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.

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