The Chart of the Week: EUR/USD in distribution, bears waiting for breakout confirmations

EUR/USD bulls are leaving the market as the market consolidates.
Swing traders are looking for signs that the market is turning and confirmation on the lower time frames.

Ross J Burland FXStreet

EUR/USD is decelerating in a phase of distribution and the following offers a top-down analysis for swing traders.

There are a number of steps that the price action will need to go through prior to confirming a new bearish bias within breakout from the current structure.

Monthly chart

The monthly chart offers a downside target in a correcting bullish market.

Daily chart

A trend line has been broken and retested on the daily chart.

Failures to get back above the counter trendline opens the risk of a breakout to the downside from a decelerating uptrend.

4HR chart

As can be seen, the four-hour scenario illustrated in the above chart shows the potential of a 61.8% retracement of the recent rally following a possible rejection at the current resistance.

The price action flow on the chart is determined from examining support and resistance structures and expected reaction to them in a falling market.

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Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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