EUR / USD traded lower yesterday during the US session in line with "risk off "sentiment seen in US stocks. It pulled EUR / USD with a one-day summit of 1.3966 to a low of 1.3845, erasing all gains made during Asian hours earlier. To be fair, the decline began before the US stock prices began to fall, and that would normally be interpreted as a sign that the feeling in EUR / USD may be slightly bearish. However, in this case clemency should be given that the initial withdrawal is understandable given that there was a lack of strong justification for prices to rally during the hours from Asia. In addition, prices remained above the flexible substrate 1394 to slide in US equities began, suggesting that the general feeling is actually upward and not downward.
Time Table
If the above analysis is correct, we should be able to expect strong support 1.385. Stochastic readings supports this as well, with currently oversold readings and favoring bullish pullbacks going forward. However, this does not mean that 1385 support is invincible. First, we just avoided an upward cycle of good fly there just hours, suggesting that the downward pressure is not exactly disappeared. Furthermore, given that the global risk appetite is still bearish, bears have wind in their sail and could overcome 1.385 if push comes to shove. Therefore, traders who wish to play the 1385 rebound may wish to wait for further confirmations and / or limit the tight stop losses as a confirmed break of 1385 may lead us quickly to 1.375 and below.
Basically, if sustained for EUR / USD is pushing low as USD expected to strengthen due to the tightening of the Fed's monetary policy. On the other hand, the ECB has no indication of tightening, although Draghi and his fellow board members have started to move away from their previous policy accommodation. Therefore, even if the upside for EUR / USD is weak, it does not necessarily mean a strong bearish potential is
Links :.
GBP / USD - Pound Recovers and Flirts with 1.67
AUD / USD - Aussie Grows Above 0 As Australian Job Data Shines
USD / JPY - Yen Up As manafacturing Impresses Japanese data
This article is only for general information purposes. 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 – S/T Bullish Narrative Hinges On 1.385 Support
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