EUR/USD Daily Analysis: We waited a bit too long to get short yesterday – price entered our 1.3640-1.3670 sell zone for several hours but never gave us the confirmation we wanted. We did have a very solid 4h bearish engulfing – a TRIPLE signal (meaning GU and AU were both pointing down at the same time = confluence) with a 1.53 median 10-candle influence but passed because the pattern closed at 1.3632, just beneath our sell zone. We would have gotten short on a rally back up but that rally never happened and the price has dropped back below 1.36 on heavy selling.
We expect more losses on this pair, with our next targets at 1.3570 and 1.3510. Draghi made it clear yesterday that the ECB will remain accommodating for as long as needed, a statement that is bearish for the Euro, while the Fed minutes revealed they are on pace for tapering to end this year. If tapering ends this year and inflation continues then that accelerates the timelien for a possible interest rate rise, which is USD bullish.
Our Preferred Trades*: We prefer getting short on rallies but after missing the initial sell from 1.3650 we need a break below 1.3570 to confirm the downtrend before we look to re-enter. If and when that happens we will begin looking in the 1.36-1.3630 range for a short. Alerts will be sent out.
Long-term Trend Analysis Chart
Yesterday’s EUR/USD SwingPRO Signal Result: No setups triggered yesterday.
Today’s SwingPRO Signal: Waiting for a break below 1.3570, then shorts from 1.36-3630.
*CandlePRO: CandlePRO can be used in conjunction with our daily analysis and “our preferred trades.” For example, if we prefer “going short” or “selling a rally” then we would look for bearish candlestick signals after a rally or near resistance levels. Alternative if we prefer “going long” or “buying a dip” then we would look for bullish candlestick signals on price drops or near support levels.
