The Chart of the Week: EUR/USD enters the bear's lair
- EUR/USD on the brink of an upside correction on the lower time frames before resuming medium-term downtrend.
- Monthly demand below the market would be targetted before the resumption of the longer-term uptrend.
EUR/USD has been rejected from the monthly support in a correction of the monthly bullish impulse. With some more work to do below the structure, the bears have the upper hand, albeit potentially only momentarily.
The following is a top-down analysis from which deciphers where the next bearish opportunity could evolve before the resumption of the uptrend.
Monthly charts
The monthly chart has corrected to a 38.2% Fibonacci retracement level, but there could still be some more room to go until the correction meets prior resistance.
In doing so, there will be a bearish prospect on the lower time frames before the bulls take back control.
As ca be seen, the bulls are already outside of the long-term bearish channel.
Weekly chart
The weekly charts show that the price is now below an important resistance structure.
In a continuation on the lower time frames to the downside for the week ahead, the chart will be forming a weekly overextended M-formation.
Daily chart
The weekly price action would enable a retest of the daily structure before the downside continues.
4-hour chart
The price on the 4-hour chart is overextended and due for a correction. Bears will wait for the price to correct before seeking an optimal entry to target monthly demand.
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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.
