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EUR/USD into New Year on lows

Monthly chart:
The pair has broken the confluence of the following price levels:
1. Long term trendline that supports lows of years 2004, 2005, 2006, 2010 and 2012.
2. 200 month SMA.
3. 50% retracement of the October 2000 to July 2008 uptrend, which contained price in years 2008, 2010 and 2012.
The next two strong support levels are July 2012 low (1.2042) and June 2010 low (1.1875).
Weekly chart:
It has been pretty much one way market since the beginning of the downtrend in May 2014. There was …
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al_dcdemo avatar

Update 1: On the first trading day of the year, the pair has lost a cent. I has broken the 2012 low at 1.2042 and after a struggle ahead of 1.20 it closed 2 pips above the level. One might argue that this decline was a result of thin liquidity, but we will see if that was the case soon enough, when most major players will return to their desks next week.

al_dcdemo avatar
al_dcdemo 11 Jan.

Update 2: The pair has broken two important technical levels in the past week: 1.20 level and 2010 low (1.1875). The decline stopped just above 1.1750 level, which coincides with the channel line drawn of May 15, 2014 and October 3, 2014 lows. On Friday it tested the lows, turned around and closed the day on highs. That was the first positive day after six day of losses and the first day after nearly a month that we could say that the daily candle is bullish. In the run up to ECB meeting on January 22, further upside is possible, especially if it manages to break above 2010 low and hold there.

al_dcdemo avatar
al_dcdemo 18 Jan.

Update 3: It was another terrible week for the pair in which it has lost nearly three cents. After SNB announcement that it is discontinuing its three-year 1.20 EUR/CHF floor, the pair has broken 2005 low (1.1639) and by the end of the week also 1.15 level. It has traded down to 1.1450 but then corrected to around 1.1550 before the weekend. Market is now even more convincingly expecting sovereign QE by ECB on Thursday, but it is hard to say whether that is priced in by now. On the other hand, if they do not deliver, there is potential for a massive short squeeze.

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