Richard Perry
Independent Analyst
Judging by the uncertainty of the situation regarding Greece’s bailout proposals, it is probably fair enough that the euro finished yesterday’s session with almost no change on the day and a “doji” candlestick (which denoted uncertainty with the prevailing trend). Technically speaking the outlook for the euro remains bearish and ultimately I see the euro retesting the recent lows $1.0520 and then $1.0456. Medium to longer term trend, moving averages and momentum indicators all suggest further downside. However for the immediate outlook, it is a little less obvious as more of a consolidation has set in in the past few days. The hourly chart still shows a head and shoulders top pattern under $1.0735 is intact which implies $1.0620. Although yesterday’s initial weakness got within 40 pips before a rally kicked in and the rally high at $1.0780 is now near term resistance, the gains seen as the European session has got underway are putting the resistance under pressure again. Technically speaking, the top remains intact whilst under the right hand shoulder high at $1.0825, but the euro bulls will be gaining in confidence if they can hold these gains. Hourly momentum indicators such as MACD and RSI have improved but not to the extent at which you would class the momentum as positive. I am still expectant that the near term top pattern will prevail but it could be a choppy one.
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