Last week President of the European Central Bank, Mario Draghi, gave the market asignal to sell EUR/USD. Before Draghi’s speech our @Trading2dayFX exclusive account provided our subscribers with our view that EUR/USD was going to reach near 1.40 and reverse. Our strategy was to wait until the target was reached and to look for an opportunity to sell one of the following pairs EUR/USD-EUR/AUD-EUR/JPY.
With EUR/USD testing 1.40 and no clear stop level for a short position, I turned to EUR/AUD and saw an opportunity to sell as the technical picture at that time was clearer and I was provided with a clear stop for a short position. So I informed members that I went short EUR/AUD at 1.49.
Later on we added to our short position by placing a sell stop order that was hit. EUR/USD also reversed after Draghi’s comments that action will be taken in June and we all know what happened next.
Once EUR/AUD reached 1.47 we took profits and we waited for an upward bounce to re-sell the pair. At first I was expecting the bounce to reach 1.4760 but it only reached 1.4751.
Today as I mentioned through my Twitter account @alexanderyf, EUR/USD was forming a bearish flag and I was looking to sell EUR again.
I decided to sell EUR/AUD again as the price was being rejected at the upper channel boundaries. Through my exclusive Twitter account for subscribers interested in FX and gold trades, I tweeted that I sold EUR/AUD at 1.4720 exactly when my trade was executed. Now at 1.4655 we are gaining 65 pips already and EUR is looking weaker, as buyers were not strong enough to stage a strong upward bounce. EUR/USD bearish flag was broken and this pair has made a new low at 1.37 and is challenging important support levels as shown in the chart below.
My view is that as long as EUR/USD stays below 1.3780 we will see the decline continue towards 1.35 where the Ichimoku cloud support is found. EUR/USD is weak and I believe all EUR pairs will continue towards lower levels during this week. Any bounce will surely meet sellers and I believe will be short-lived.
To conclude, the downtrend is strong as the reversal from 1.40 and the signals by Draghi were very important. EUR is at a trend reversal point and sellers continue to show their strength. The trend is down and price is expected to move lower towards at least 1.35. Through our exclusive Twitter account @trading2dayFX, subscribers receive all my trades and analysis for major FX pairs plus gold plus oil. My trades have more than covered the cost of the subscription before the half of the month is over.
Disclosure: None of the information or opinions expressed in this blog constitutes a solicitation for the purchase or sale of any security or other instrument. Nothing in this article constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. Any purchase or sale activity in any securities or other instrument should be based upon your own analysis and conclusions.