EUR/USD Daily Outlook- August 22, 2014

Christopher Lewis

The EUR/USD pair fell initially during the session on Thursday, testing the 1.3250 level, and finding support there. This support cause the market to bounce and form a hammer, which of course is a fairly bullish sign. If we can get back above the 1.33 level though, the market then will have to argue with the cluster that is sitting in the neighborhood of 1.3375, which is an area I do not believe the market will break above. Even if it did, we still have to deal with the 1.3450 level, and more importantly the 1.35 level which is a major one as far as I can see.

I think that a break down below the bottom of the hammer is a nice selling opportunity as well, as we should eventually head to the 1.30 level which is my longer-term target anyway. That’s the next major support area, and as a result the market will in fact try to get there given enough time. That doesn’t mean that we won’t bounce, and that’s exactly what I’m expecting at the moment. With that, I am a seller on these bounces that show signs of resistance, and will even look to hourly charts to make entries.

Nice trend, don’t find it.

It’s a nice trend as you can see, and as a result I believe that the market will continue to offer plenty of selling opportunities, on the shorter-term charts. The 1.3350 level in my opinion should offer the first selling opportunity on a bounce, and I would not hesitate to sell a resistant looking candle in that general region. I believe that every time this market bounces, there will be sellers willing to step in and press the issue. I also think that the 1.30 level is probably about as far as we go to the downside for the next several months. With that, I am bearish but I am looking for small gains, as easy money is probably been made anyway. With that, short-term trade will be the way to go as the day traders will take over.

EURUSD 82214

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

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