MONDAY'S SHORT RECOMMENDATION TRIGGERS; DEEPER SETBACKS AHEAD
Eur/Usd: Could finally be showing signs of a top with the daily RSI recently crossing above 70 and the market reaching the 78.6% fib retracement off of the major 1.4720-1.2455 move at 1.4235 on Monday. Yesterday’s bearish doji close reaffirms prospects for a short-term top and as such we have gone short (as per our recommendation in Monday’s Daily Classical) in anticipation of a more significant pullback over the coming days. Look for a break below 1.4100 over the coming hours to accelerate declines and open deeper setbacks towards initial support by the 10-Day SMA at 1.3990, which guards against our 1.3930 objective. Only back above 1.4250 negates and gives reason for pause. Position: SHORT @1.4145 FOR A 1.3930 OBJECTIVE, STOP 1.4260.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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