Potential signal:
- Obviously, this is a pair that is extraordinarily negative.
- On a move toward the 1.05 level, on the first signs of exhaustion on the hourly chart, I am selling this pair again, with a stop loss at the 1.0575 handle.
- I would be aiming for the 1.0350 level.
In my daily analysis of the EUR/USD pair, the first thing that I notice is that the euro has completely collapsed.
This should not be a huge surprise, considering that the PMI numbers, in both services and manufacturing sectors, have been horrific in that part of the world.
We have seen Germany, France, the EU, and even peripherally speaking, the United Kingdom all disappoint through these inflationary numbers. In other words, that part of the world looks likely to slow down economically, and that is reflected in the currency markets.
Top Regulated Brokers
Technical Analysis
The technical analysis for the EUR/USD pair is absolutely horrific, and we have plunged all the way down to the 1.0333 level, only to turn around and show signs of life. It’s worth noting that the 1.05 level, an area that has been important multiple times in the past, has now been broken through quite dismissively. It is because of this that I think short-term rallies will more likely than not continue to see plenty of sellers above, specifically at that 1.05 level, as there should be a certain amount of “market memory” in that general vicinity. The candlestick of course is ugly, and it has a huge range, which means that a lot of stop loss trades have been wiped out.
If we were to break above the 1.05 level, then we could make a run toward the 1.06 level, but it’s not until we break above the 1.06 level that I would consider this a situation where the trend has changed. With this being the case, I think we’ve got a situation where the market will continue to see a lot of volatility, and with that being the case, I think you have to look at this through the prism of a market that very well could drop significantly. If we break down below the bottom of the candlestick, I think that opens up a longer-term move toward parity.
Ready to trade our free daily Forex trading signals? We’ve shortlisted the best forex brokers in Europe to check out.