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Forex: EUR/USD keeps selling pattern; 1.30 under threat

The Euro fortunes seem to have terminated right at the inflection point 1.3150/60, where renewed downward pressure sent the pair sliding to currently be pressing against key support 1.3040, and ahead of the round 1.30.
Failure to maintain gains by the S&P 500 and other equity indexes did not help to ease the pressure in the pair.

As Valeria Bednarik, chief analyst at FXstreet.com, notes: "The hourly chart shows 20 SMA gaining bearish slope above current price while indicators head south in negative territory, supporting further slides. In the 4 hours chart technical readings also support the downside, with recent lows around 1.3010 as key level to break, targeting then the 1.2880 price zone."

In a side note, it is interesting to see the ongoing bearish pattern in the EUR/USD, best noticed from the H4 chart, in which price has developed a sequence of somewhat predictable behaviours in each correction before the subsequent sell-offs.

Note, the first slide off 1.37 was followed by a 140 pips correction, then price tumbled for a second time, now the correction was 170 pips before another selling to near 1.33, from there, a 130 pips correction took place, only to see price knocked again, with a 170 pips correction, then once again the latest big sell-off that stalled its correction at 140 pips only to resume bear trend. So far, we can observe a 170-140-130-170-140 sequence before new selling resumes.

What this pattern means? If history is any indication, other than being able to measure corrective extension, it also indicates that after every short-term bull run, not only sellers step in to resume downtrend to the initial reversal point, but the behavioual dynamics suggest success to break into fresh trend lows is impeccable, so far.

Also note that in every single correction higher since the top of 1.37, the 50-61.8% fib retrac from every leg lower, has acted as a reliable indicator to signal swing tops before sellers reinstate shorts.

Forex: USD/JPY above 92.50; deflation persists

Closing yesterday's up +2.71%, Nikkei index opens today down last -0.27%, with USD/JPY around the 92.55 level, off session and 3-day highs at 92.86, bouncing from daily lows at 92.00 round. USD/JPY is still lower by -0.91% for the week, with latest CPI for the month of January at -0.2%, in line with expectations and the same as previous, 9th consecutive month in the negative, while household spending increased +2.4% year on year, highest in 6 months.
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