No major development for EUR / USD. Prices traded mainly from 1.36 to 1.365 yesterday despite strong economic figures from Germany in the form of better than expected retail sales and more high unemployment change. This and the "risk on" global appetite seen in European session and US, where S & P 500 finally recorded a gain in 2014 suggest that the overall downward pressure on EUR / USD remains strong.
Time Table
Given this context, the probability of price to break the level of 1363 resistance is now lower, and a retest of 1.36 and even recent low oscillation of 1357 is possible. That said, it should be noted that the bulls have been rather resilient in the last 2 days. In addition, the curve Stochastic upper tip after rebounding from the "support" of 30.0, suggesting that an upward thrust to 1365 can not be ruled out.
FOMC meeting minutes of the day may result in increased volatility and, therefore, it will not be surprising to see prices swing wildly between 1.36 to 1.365 despite the bearish bias. There is even the possibility that the wild swings may overflow to the broader trading range of 1.357 to 1.3675 and may even exceed the post announcement should slightly strong knee jerk responses are seen. Therefore, traders should be aware of the high probability of "false breakouts" and conservative traders may want to wait until the dust settled before engaging in both directions.
Table Daily
daily chart shows the baby steps of Triple Top pattern awaiting confirmation bearish rejection 1363. Current candlestick pattern is promising with a potential Evening Star bearish reversal on the way. However, stochastic readings actually favor a bullish push towards 1.38 again with Stoch lower curve. Also, if we look at the record low that was formed in the oversold region, there is a clear divergence between price levels and levels of Stoch, adding more upward pressure because it suggests that the recent decline of 1 38 can be a little more aggressive.
the best way to solve this ness "oversold" would be the price continues to trade sideways in 1363 for an extended period of time will allow Stoch retreating more and leave Bears take profits before launching push down the next. Will it be really possible? Of course not, but from a technical point of view, the more time spent below 1.36, the probability of a stronger downward extension increases.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or its subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
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Read More : EUR/USD Technicals – No Immediate Bearish Threat Below 1.363
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