Yesterday I posted an outlook on the Eur/Usd, today I want to go a bit more in depth with the pair by looking at the daily charts.
The first thing I noticed when looking long term is the Fibonacci retracement level all the way from the beginning of this up move back when the price was 1.2464 that the .382 level is around 1.4119 area. We are getting near that level now so that could be a major area of support that the Dollar must contend with for this bullish move.
Next I am going to zoom in to the daily chart and look at this particular move to the downside. First I have drawn in the support level at 1.41783 so we have that to contend with, in addition to the Fibonacci support level I wrote about earlier. Next look at the red bars in this current down move from the 1.5100 levels, there are seven red bars and 3 green bars. There are 4 red bars in a row which means for days of strong selling. At the end of this move on Friday the pair cracked 1.4300 and headed lower but then stopped and bounced back up. As a result a doji was formed and that indicates indecision.
There is a great amount of pressure against this current bullish Dollar move. I am not saying this move is over, rather I am saying that there is great deal of support to deal with and in order to find sellers of this pair there must be an incredible amount of positive dollar news. My advice to traders is if you have made profits selling this pair be ready for a turn at any time, do not let your profits get away from you. In addition be cautious if attempting to jump on the shorting band wagon at this point, that could be dangerous.
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