EURUSD Likely to Move Lower but Oversold Signal Flashing
EURUSD Price, Chart and Analysis:
- EURUSD sitting just above 1.1200 as lower highs continue.
- CCI indicator is in oversold territory – will it spark a bounce?
- Retail traders have increased net-long positioning sharply in the last week.
The pattern of lower highs, and lower lows to date, highlight the weakness of the single currency against a resurgent US dollar. The pair hit a recent peak around 1.1450 less than two weeks ago before the bearish longer-term pattern reasserted itself, prompting the pair to fall sharply lower. The speed of the recent fall has pushed EURUSD into oversold territory using the CCI at the bottom of the chart, and this may see a small bounce in the pair within a longer-term bearish pattern. This, potential, short-term pullback may also be aided by the recent breakdown in this pattern of lower highs – the pattern was broken on March 20 while the lower low pattern is still in place. This may see the pair range trade in the short-term, again offering the opportunity for a small technical retracement.
EURUSD Daily Price Chart (August 2018 – March 29, 2019)
Retail traders are 67.4% net-long EURUSD according to the latest IG Client Sentiment Data, a bearish contrarian indicator. Recent substantial changes in daily and weekly sentiment, increasing retail traders net-long positions, give us a stronger bearishtrading bias for EURUSD.
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