The euro has lost almost 2% since the beginning of the week which is considered a big price change for a short time.
In terms of technical analysis, traders are now watching a downward move from the swing high of 1.2266 reached on May 25. In fact, this move is more than a downward correction but a full-scale bearish price action following the bullish cycle in the period of 31.03.21 to 25.05.21. In other words, traders have managed to earn from more than half of that bullish cycle. Now the sellers have a great opportunity to bring about crucial changes.
When it comes to market conditions, EUR/USD has been trading with the highest volatility for more than 3 months. The average candlestick per 24 hours measures 83 pips this trading week.
Judging by the current price level, market participants have already secured the price below the psychological area of 1.1950/1.12000/1.2050 despite the fact that the euro has been extremely oversold against the US dollar.
Looking at a daily chart, we see that the bearish price action pushed the price down to the levels of early April.
This situation reveals strong speculative interest among market participants who do not care about the oversold market conditions and carry on increasing short positions.
As long as the price is making this inertial move, it is expected to decline lower towards 1.1850.
An asset is able to develop a steady downtrend provided that the market goes through the following cycle in full: price action → correction → price action.
From the point of complex indicator analysis, we see that all technical tools indicate a robust bearish move, signaling selling opportunities in all timeframes.
InstaForex Group