Selling EURUSD into gains with a rejection of resistance zone

The EURUSD pair moved lower, as we were expecting. The pair broke an important support zone at around the 1.3820/00 levels, as can be seen in the daily chart below and declined towards the 200 moving average on the 4 hour chart. I think selling gains in the short term should be preferable, as the pair has more room towards the downside.

The pair broke a flag yesterday, and moved lower, as can be seen in the chart below. The broken support zone may well act as a resistance in the short term for the pair. So, if the pair retraces a bit from the current levels, stops around the 1.3820/30 resistance levels and creates a bearish divergence, then we can jump into a sell trade. Remember, try not to enter without confirmation, as today is Friday, and we do not want to get caught in a bad trade.

Initial target should be around the 1.3720 level, and final target could be around the 1.3660 level. Stop should be placed above the 1.3860 level.

Reviewing yesterday’s events and trades
Yesterday, was an eventful day, as most majors moved down as expected. The EURUSD and GBPUSD moved lower as projected. The EURUSD broke the 1.3800 level, and traded towards the 1.3750 level. Yesterday in the NY session, the US initial jobless claims, existing home sales and Philadelphia fed manufacturing index data was published. The outcome was a positive one, as jobless claims fell to 320K and Philadelphia fed manufacturing index rose to 9.0 from -6.3. The US dollar traded higher after the data release. The market is recovering from the yesterday’s losses as of writing.

Fundamental Outlook for the day
Today, the Canadian inflation and retail sales data will be published. The market is expecting improvement in the retail sales. If the data does not disappoint, then we can witness some recovery in the Canadian dollar. Other than this, four fed members (Bullard, Fisher, Stein and Kocherlakota) are scheduled to speak later during the NY session. The Euro zone’s consumer confidence release is also lined up during the NY session. One can expect some movements in the NY session around these events. So, try not to jump into any risky bet just ahead of the weekend.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: GBPUSD, EURGBP, USDCAD, NZDUSD, USDJPY, EURJPY, EURAUD and EURCHF.
Get it HERE: Vladimir’s Markets Forecast

Have a nice weekend friends. Happy trading!

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