EUR/USD, bears want 1.00!
EUR/USD closed the 8th month in a row in red! If we take a look at monthly graph, 1.00 could be target for the bears, but it want be easy to catch. 1.00 is for sure the strongest monthly support, the previous strong resistance from 2002., but there is several strong supports before as well. What could be the reason that the pair countinue to fall to this level? FED’s rate hike! Based on the US important economic datas, that moment is not far away, but time has not been specified. The word ‘patience’ is still the main role in the FED’s statements. The year has just began and it would be interesting at the main currency pair, that’s for sure. This is long term chart and possible development, don’t hurry in your short positions on Monday! 🙂 Keep following my analysis!
Forex Trader 
I think that before we all give up on the Euro and celebrate parity with the Dollar there is need to look at the monthly candle. It is an inverted hanging man. Of a hanging man Steve Nison in his book Japanese Candlestick Charting Techniques says ‘Because a long lower shadow is viewed as a plus, and since the hanging man has such a shadow, it is especially important that one wait for bearish confirmation with the hanging man. At the minimum this would be a lower opening under the real body of the hanging man. But I usually recommend a close beneath the hanging man’. Clearly waiting for the close of March’s may have seen the market move another 1,000 pips as it did in January. Whilst I am not a Euro bull by any stretch of the imagination there is a risk that the inverted hanging man will confirm and price action will remain above Friday’s low which is about 20 pips below the close. As soon as Friday’s low gives way confidence should start to build that the market is heading towards parity. The next big level will be January’s low.
However there does remain the risk of the long over due relief rally. The weekly COT report showed the Euro shorts had been trimmed back to 178K from 186K and back to a level last seen on 13th January 2015. The fact that this is now the third week where the shorts have been trimmed does suggest that the market is not so convinced that parity is the next stop and the risk of a relief rally has increased. Having said th the retail market has turned long EUR/USD which is a fair indication that the price action will continue short. For me, I shall be look to entering short at the 382 fib level of Thursday’s high to Friday’s low. Weekend maintenance work on the platform has stopped me looking at the charts and giving precise figures.
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We could probably expect some bounce after 8th month fall in a row, but we can’t denied this monthly technical view. There will be a lot of development in the coming weeks and months and we know that market could turn in a minute. I am not a long term trader and this is just long term technical view, not trading tip for the short term traders.
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I think we see EUR/USD at 1:1 level. Periods of hair that lasts longer than the growth. Can we believe the bears are stronger?! I think so.
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Bears are serious Cristi, I can’t find 8th red months in a row.
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I agree. The thing is that there simply has not been any serious retrace so far. I think when it goes, it will go with a vengeance. From a technical prospective three needs to be a test of parity and the previous low. However forex never goes in straight lines generally. It may go to parity direct or there maybe a couple of retracements with a potential risk of a revisit of 1.20000 or even the bottom of the traditional EUR/USD range at 1.30000. The fact that for the third week on the COT report we have seen the number of Euro shorts trimmed tells me the appetite is waning. The real problem for the bears will be if it becomes a rush. Whilst I am looking to enter short as currently the trend remains short, however I am very vigilant on a potential change and will not hesitate entering long positions.
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If Greece saga continue and it will for sure, everything is possible. Don’t forget, it’s always a first time for something! This could be that first time. Fck history. 🙂
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