EUR/USD – Remains Wound Up

This is your longer term outlook of the EUR/USD.  We will look at the daily chart in this analysis, and what can be expected over the next week.

Despite having having a “It might actually breakout!” moment, ultimately that breakout was short lived as we traded well within the former range most of last week.

The trend remains down on the longer time frames, but remains in a sideways correction.  Trading was not as choppy as we had seen in the weeks past, but a renewed push in the trend we did not see.  The breakout downward was false, at least for now, and can be deemed so until the pair drops below 1.3400.  A move back below that point would be our first indication of another downward move, and would be confirmed by a penetration of the lows at 1.3265.  That would indicate another leg down in the downtrend.  A target remains as 1.3060.  Support along the way is at 1.3270 and 1.3200.

EUR/USD Daily, FreeStockCharts

The daily downward trendline currently crosses at 1.3600.  A move above this would be first indication of a reversal higher.    There is a bit of “no mans land” between this point and 1.3800.  A daily close above 1.3800 would confirm the reversal.  Targets on the upside are also marked at 1.4030, 1.4170 and 1.4300.

Keep in mind also the small upward sloping trendline which has developed over the last 8 days.  A break of that trendline can also give early signals of a decline.  Given it’s small length it is a not a pivotal signal, but can be used if desired.

Cory Mitchell, CMT

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