Weekly
- Last Candlesticks pattern: Shooting star
- Time of formation: 03 May 2016
- Trend bias: Down
Daily
- Last Candlesticks pattern: Shooting star
- Time of formation: 3 May 2016
- Trend bias: Sideways
EUR/USD – 1.0405
Although the single currency staged another strong rebound last week to 1.0654, renewed selling interest emerged there and euro has dropped again, suggesting the rebound from 1.0352 (last month’s low) has ended there, hence bearishness remains for test of 1.0372 support but break there is needed to add credence to this view, bring retest of said recent low at 1.0352 but break there is needed to confirm recent downtrend has resumed for further fall to 1.0300 and later towards 1.0200 which is likely to hold from here.
On the upside, whilst initial recovery to 1.0490-00 cannot be ruled out, reckon upside would be limited to 1.0550-55 and bring another decline later. Above the Kijun-Sen (now at 1.0612) would defer and risk another test of said resistance at 1.0654 but only a daily close above there would defer and suggest a temporary low is formed, bring retracement of recent decline to 1.0710-15 (38.2% Fibonacci retracement of 1.1300-1.0352), then towards 1.0820-30 (50% Fibonacci retracement) but price should falter below resistance at 1.0873.
Recommendation: Sell again at 1.0550 for 1.0300 with stop above 1.0650.
On the weekly chart, although the single currency recovered to 1.0654 last week, euro met resistance there and has fallen again, retaining our bearishness for early downtrend to extend further weakness, break of 1.0352 support would bring subsequent fall to 1.0220-30 (1.618 times projection of 1.1616-1.0912 measuring from 1.1366) and later 1.0150 but near term oversold condition should prevent sharp fall below latter level and reckon psychological support at 1.000 would remain intact.
On the upside, expect recovery to be limited to 1.0470-80 and 1.0550-60 should limit upside, bring another decline. Above 1.0592 resistance would risk test of last week’s high at 1.0654 but break there is needed to signal a temporary low is formed, bring retracement of recent decline to 1.0710-15 (38.2% Fibonacci retracement of 1.1300-1.0352), then towards 1.0820-30 (50% Fibonacci retracement) but upside should be limited to the Kijun-Sen (now at 1.0859) and price should falter below resistance at 1.0873.
