Forex Signals: Bulls Have Little Left, Bears Well Rested

EUR/USD Daily Analysis: EU continued to push upward yesterday, above it’s already bullish channel. At this point there is not much upshot in getting long (besides the trend) as the pair is very overbought, and a LOT of upside to getting short as the bottom of it’s bearish channel is down around 1.36. We would really like to get short this pair, at this price level, but we just haven’t seen any bearish evidence yet that the tide is turning, leaving open the strong possibility that we could see another high to 1.3780 before the (much-needed) correction.

Side note: EU and USD/CHF are strongly inversely correlated at the moment – flipping one produces a near mirror image of the other.
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Our Preferred Trades*: Our preference is to sell into rallies with a STRONG bearish candlestick signal or other technical evidence that the bears are gaining momentum. The 14 period RSI is currently above 70 on the 4h charts – normal during a strong up trend – but a break back below 70 could open up the door for a strong correction down to 3715, 3690 and 3635.

Yesterday’s EUR/USD SwingPRO Signal Result: No EU SwingPRO trades taken yesterday to report on.

Today’s SwingPRO Signal: We removed our support from yesterday as price got too far away to offer a solid risk/reward ratio, but we are tracking several horizontal support levels (e.g. 3725) and if we do get short on a support break PRO alerts will be sent out.

*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.

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