EUR/USD Retracement Expected

Doug Rosen

By: Doug Rosen

This pair has been bullish for the last few weeks and I don't see any reason for that to come to an end. At the time I am writing this analysis price has been in a retracement, however, I think it is prepping to continue further to the upside. On the weekly chart the stochastic is pointing up and we have retraced back to the trend line that was broken last week as well as the ema's. On the daily chart price has come into contact with the 144 ema and a bounce is expected, however, the stochastic is in the overbought zone and crossing down, a sign that further action to the downside is possible so I need to observe this pair carefully before making any decisions.

EUR/USD Daily Chart 10/31/11

Looking at the 4 hour monthly pivot chart the powerful recent drop down has caused the 5 ema to cross below the 13 ema and the stochastic is pointing down after falling out of the overbought zone, however, I have an ascending trend line that has been respected three times that overlaps with the R3 1.3920 and the 55 ema so I would expect some type of a reaction at that level.

EUR/USD 4 Hour Chart 10/31/11

Moving on to the hourly weekly pivot chart price has just hit the weekly M2 at 1.3976 overlapped with the 144 ema with a stochastic in the oversold zone. The 233 ema overlaps with the ascending trend line I just spoke about.

EUR/USD 1 Hour Chart 10/31/11

Finally, on to the 15 minute daily pivot chart price has fallen way past the S3 pivot and the lower Bollinger band is closing in on price and pointing up. The stochastic is in the oversold zone crossing up and out. I do expect price to continue down then to react around 1.3920 then to start to head up again.

Doug Rosen
Doug Rosen is a Florida-based Forex trader who became a skilled technical trader through 3 years of intense practice and self-teaching. He now coaches a live trading room and analyzes the market on forextradeplans.com.

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