Richard Perry
Independent Analyst
EUR/USD
The euro is under mounting pressure now. Two decisive negative candles in the early part of this week have completely changed the outlook. A strong bear candle that closed below the support at 1.1750 has now been followed by an early move this morning to breach 1.1695. This is the market now looking to confirm a topping out. A close below 1.1695 would be the confirmation of a downside break of a two month trading range (effectively a top pattern) that implies around -300 pips of further downside in the coming weeks. An unwind towards the old resistance levels 1.1420/1.1490 would then be a viable target. Momentum is increasingly corrective with RSI into the mid-30s whilst also having downside potential. Increasingly the outlook is becoming one where intraday rallies are a chance to sell now, and any bull failure between 1.1695/1.1750 would add weight to this strategy. Below 1.1695 the first real support is not until 1.1490.
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