Early this week, the EUR/USD was unable to break above the 1.3170 level and it was trading lower to reach 1.2918 on Thursday. "EUR/USD rally stalls at key point," affirm TD Securities' analysts Shaun Osborne, and Greg Moore, "bias may be shifting back to bearish in the short run."
TD Securities team says that "daily price action earlier in the week formed a firm of the 1.3150 area," but the "weakness and the reversal were confirmed by subsequent price declines."
"Also, the DMI oscillator suggests that the bull trend has weakened – even if it remains positive," adds TD team. "Daily support is 1.2925 now (former trend channel ceiling) but the risk of a deeper pullback has grown this week. Price action suggest that the coming week will be characterized by further consolidation and possibly more weakness towards 1.26/1.27."
"Broad congestion resistance at 1.3060/1.3260 is capping the topside for the moment," Moore and Osborne affirm. "Longs should tighten up stops. Shorts will look to establish or increase positions around 1.3050 we think."