EUR/USD shorts must hold below 2 points, 1.1006 and 1.1003. 1.1006 is the rising 100 day average while a break lower at 1.1003 begins the new EUR/USD downtrend. In the past 3 weeks, 1.1006 was 1.0900’s and has been slowly rising ever since while 1.1003 has been steadily dropping.
A break at 1.1006 and 1.1003 targets next 1.0990, 1.0942, 1.0938, 1.0925 then begins 1.0865, 1.0857, 1.0823, 1.0766, 1.0750. 1.0671, 1.0643. EUR/USD downside extreme prices begin at 1.0591 and 1.0565. EUR can handle lower prices but as a strategy to take on new shorts to target 1.0500’s is a scary proposition because EUR/USD in the middle averages are severely, severely oversold. But to head higher with any condidence in longs, 1.1200 must break. We’re ranging between 1.0900’s – 1.1200. In the DXY, its seen where longs are quite safe over time and a clear buy dip strategy but in EUR/USD, the same is not seen. Shorts are only a few hundred pips from bottoms. The strategy remains sell rallies but with caution despite a severely oversold EUR. Greece should remain the gift that sees EUR hits its extremes.
Above exists 3 points to head higher, 1.1044, 1.1047 and 1.1049. Then targets become 1.1152 and 1.1174 and still price remains below 1.1200.
Thank you to all friends and readers
Brian Twomey, Inside the Currency Market, btwomey.com