After taking a short break last Friday, bears are back dominating EUR/USD. On Monday, the major currency pair is falling towards 1.1280.
It is most unlikely that market players made some kind of reappraisal of the Euro prospects. On Friday, they closed short positions and helped the pair to rise a bit, but that’s all.
Fundamentally, the “greenback” is looking strong thanks to a gradual reduction of the QE programme. Other reasons are a possible rate hike in the future and the demand for “safe haven” assets.
In the H4 chart, after completing the correction at 1.1320, EUR/USD is trading downwards to reach 1.1116 and may later start a new correction with the target at 1.1360.
From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is moving above 0 outside the histogram area, which means that it may leave the area soon and continue falling towards new lows.
As we can see in the H1 chart, after the correctional channel at 1.1280, EUR/USD is expected to continue falling with the first target at 1.1220. After that, the instrument may correct to test 1.1280 from below and then resume trading downwards to return to 1.1220.
If later the price breaks the latter to the downside, it may continue falling with the short-term target at 1.1160. From the technical point of view, this scenario is confirmed by the Stochastic Oscillator: its signal line is moving below 20, thus implying a further decline of the price.
Disclaimer: Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.