By: Colin Jessup
The EUR/USD had a bumpy week last week and although it climbed as high as 1.3290, it managed to close the week lower than it opened at 1.3120 after falling as low as 1.3095. All of this adds up to a weekly inverted hammer formation, which followed the prior week's bearish engulfing candle. Friday's trading printed what traders refer to as 'Railroad Tracks' on the daily chart with price action falling 176 pips. This seems to confirm that investors are not so happy about the state of the EU and the bailout status of Greece, fearing that Spain or Italy could be next. Price is currently falling at about 12PM in Sydney & if the Bearish sentiment continues, we will see support at 1.3000 which is both the Weekly & Monthly S1 and then probably fall to the 30 day low at 1.2970. Above the current price level of 1.3106 we have the Weekly Pivot at 1.3160, the Daily Moving Average at 1.3190 and Weekly R1 at 1.3240. While the intra-day tone seems to be Bearish, I will not consider this pair truly bearish until we close below 1.3000, and break out of the range that this pair traded in for most of February.
Happy Trading!