EURUSD is in a correction phase after topping and rolling over just above 1.1300. Today the pair has been edging lower near the lower 4h Bollinger bands and has failed to rally above 23.6% Fibonacci level. The lower highs and lower lows suggest that this market is weak even though it is trading at lower Bollinger bands. Dollar index looks like it is trying to break higher which confirms the bearish short term view for EURUSD. The 30 period SMA is about to cross below the 50 period SMA while oscillators are moving sideways near oversold levels.
EURUSD, 60 min
Price is creating lower highs and lower lows while faster moving average (30 period) is below the slower (50 period) and point lower. However, the Stochastics oscillator indicates oversold conditions together with the price being at lower Bollinger bands.
As the pair is correcting lower after hitting resistance at 1.1300 plus levels and the price is making lower highs and lower lows the indications are bearish. Industrial Production numbers are out in a few minutes and might provide some volatility that we could use to sell the market. Provided the volatility isn’t too excessive. Should the price rally inside my sell area between 1.1150 and 1.1180 and provide us with sell signals there we are looking to engage the short side with a view of covering the shorts at target areas. Target 1: 1.1040-1.1085 and Target 2: 1.0965-1.1010.
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Chief Market Analyst
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