EURUSD jumped higher yesterday, and broke a critical resistance of 1.3200. However, the pair struggled to break an important down-move trend line as plotted on the 4 hour chart below. So, I think we have an interesting sell opportunity developing for today. As long as we hold below this trend line I think the pair might continue to move lower again. We also have a bearish hidden divergence on the 4 hour chart which matches our bearish view.
On the 1 hour chart, EURUSD has a trend line and a support coinciding at around 1.3250/40 as shown below. So, if the pair manages to break the trend line as plotted on the 1 hour chart, and have a close below it, then it would be right time to jump into a sell trade. Initial target should be 4 hour 20 MA (Moving average) and final target should be around the last low of 1.3110. Stop should be placed above the down move trend of the 4 hour chart.
Reviewing yesterday’s events and trades
There was no major fundamental event yesterday, but still US dollar moved lower, and EURUSD traded as high as 1.3280. There can be a couple of reasons for such a move. One can be weak NFP numbers last week, and other can be Syria’s tensions easing a bit, which overall helped the risk sentiment and pairs like EURUSD, AUDUSD, NZDUSD and GBPUSD climbed higher.
Fundamental Outlook for the day
Earlier in the day, Chinese production and retail sales data came out better than expected, which is keeping risk sentiment alive as all major pairs are still treading in a positive territory. Today again, we do not have any major fundamental event risk lined up from the US. Some of the low risk events that are scheduled later in the US session include, Canadian Housing starts and US National Federation of Independent Business (NFIB) Small Business Optimism Index. NFIB Small Business Optimism Index is expected to improve from 94.1 to 94.8, but I do not think that the data release can have any major impact in the market. All the focus now remains on the ongoing Syria events, and any news can spark volatility in the market. So, watch closely all news wires.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: NZDJPY, GBPUSD, EURGBP, USDCAD, NZDUSD, AUDUSD, GOLD, SILVER and GBPCHF.
Get it HERE: Vladimir’s Markets Forecast
Trade safe friends. Happy trading!
