EUR/USD Is Sending Currency Bears Message
Recently, official data showed that euro zone industrial production declined by 0.8% in Feb (month-on-month), missing analysts' forecasts. Additionally, industrial production (year to year) rose less-than-expected in Feb, which pushed the euro lower against the greenback. As a result, EUR/USD declined under the Feb high, invalidating earlier breakout. How low could the exchange go in the coming days?
In our opinion, the following forex trading positions are justified - summary:
EUR/USD: short (stop-loss order at 1.1512; initial downside target at 1.0572)
Yesterday, we wrote:
(...) although EUR/USD moved little higher, the pair remains under the key orange resistance zone. Therefore, in our opinion, as long as there won't be a breakout above it and the red rising resistance line (based on the Apr and Jul 2015 lows), further improvement is not likely to be seen.
From today's point of view, we see that the above-mentioned key resistance zone stopped currency bulls once again, triggering a pullback. With this drop the exchange rate slipped under the Feb high, invalidating earlier breakout, which is a negative signal that suggests further deterioration. Additionally, the CCI and Stochastic Oscillator are very close to generating sell signals, which increases the probability of further declines.
Courtesy of http://www.sunshineprofits.com/
Nadia is a private investor and trader, dealing in currencies, commodities (mainly crude oil), and stocks. Using her background in technical analysis, she spends countless hours identifying market trends, major support and resistance zones, breakouts and failures. In her writing, she presents complex ideas with clarity that enables you to easily understand market changes, and profit on them. Nadia is the person behind Sunshine Profits' 3 premium trading services: Forex Trading Alerts, Oil Trading Alerts, and Oil Investment Updates.
Przemyslaw Radomski, CFA, is the founder, owner and the main editor of SunshineProfits.com.