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EUR/USD risks correcting lower from 1.0930

© Dukascopy Bank SA
"If volatility is sustained over a period of time, it's likely to decrease the odds of further Fed rate hikes, at least at the pace that the market's pricing in, and that's obviously negative for the dollar."
- Commonwealth Foreign Exchange Inc. (based on Bloomberg)

Pair's Outlook
EUR/USD created a classical long lower shadow candlestick during the session on Friday. It indicates that short traders controlled the pair, but then lost overall control to the bulls who managed to make an impressive comeback. Such a candle followed a strong surge on Thursday, meaning the up-trend seems to be diminishing. The Euro is at risk of tumbling from a December downtrend near 1.0930. The key bearish obstacle is placed above 1.08 (55-day SMA, monthly PP). The bullish success, however, can send the pair as high at 100-day SMA at 1.1024.  

Traders' Sentiment
The bullish portion of SWFX open positions rose further from 44% to 45% by Monday morning, while 100-pip long pending orders returned back into red (53% bearish) over the weekend.

© Dukascopy Bank SA


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