- The pair has been in solid down trend
- Simple Moving Average has been working as resistance
- Sellers to keep an eye at a bearish reversal to go short again
- Intraday price action has been choppy
EUR/USD Going South with Good Momentum
The pair has been very bearish on the H4 chart for the last six weeks. It had a strong bearish last week but had a bounce at 1.07650. As expected, the pair has been having a bullish correction. Simple Moving Average has been a strong resistance. The sellers may wait for the price to produce a bearish reversal pattern at SMA 30 to go short again in the pair. The pair may make another lower low and find its next support around 1.07000.
On the other hand, if the price breaches SMA 30 and confirms the breakout, the buyers in minor charts such as the H1 and other intraday chart traders may look to go long. Nevertheless, the pair is in strong bearish trend in major charts. Thus, unless it produces a strong bullish reversal pattern such as double bottom, the buyers may not be that keen to go long in the pair.
Choppy Price Action despite Finding a Strong Support
The H1 chart shows that the price had double bounces at 1.07700. At the second bounce, it produced an inside bar but headed towards the North with good momentum. Upon finding its resistance around 1.08200, it had a bearish correction and made another bullish move. The price has not been heading towards the upside with good momentum though. The buyers may be keener to go long above 1.07700 and push the price towards 1.08500. If it does not make a breakout with good momentum, it still may head towards the North. In that case, it would be tough for the buyers to find entries.
The H4 chart favors the Bear. The H1 chart looks bullish-neutral. We may see some good bearish move later in the week. Let us wait and watch what the price action suggests around SMA 30 on the H4 chart.
Written by: Md Tareq Sikder, Senior Analyst Forex Prop News
Contact and follow Tareq on Twitter: @tareqfpn