EUR/USD starts week with bearish gap

Friday's price action and a large downside gap confirmed an assumption that there is a formidable resistance area between 1.39 and 1.395. Accordingly, while there could be a rally today in order to cover the distance between last week's close and this week's open prices, it is unlikely to extend beyond 50 pips. Despite the ‘buy' signals on the weekly and monthly time-frames the outlook on the single European currency is still considered to be bearish.

There was a slight decrease in the number of short positions, from 71% down to 68%, and the sentiment with respect to EUR/USD remains strongly bearish. Meanwhile, the difference between the buy (45%) and sell (55%) orders is currently insignificant.