EUR/USD is down below a key support level [Video]

Ali Mortazavi Errante

As seen on the four-hour chart, EUR/USD sellers have taken control, driving the pair lower towards the 1.02 hurdle in the wake of a stronger dollar. Bearish sentiment has been accelerating since the triangle’s lower border failed to hold sufficient support at the 1.03043 level. As a result, a further decline led to a decisive breach of the 50-EMA, coinciding with the ascending trendline.

Bollinger bands also exhibit an intensifying bearish momentum with the bands widening quickly and the price falling sharply out of the bands to the downside.

Arousing selling forces can keep the euro sellers on track for achieving the 1.02136 barrier. While it is likely to see a rebound towards the broken trendline, the market will still remain bearish in the short run as long as it is below the 50-exponential moving average. Breaking the 1.02136 hurdle can send the price lower towards 1.01575. further drop below this level will turn attention to the 200-EMA before putting back the parity into the spotlight.

Otherwise, if bulls get back to their seats the fall may stall at the 1.02136 key level. In order to resume the rally, however, buyers need to keep up pushing the price above the 1.03950 last top.

Short-term momentum oscillators imply a bearish bias in the market. RSI is trending down in the selling area, getting closer to the 30-level. Momentum is also moving down below the 100-threshold. MACD has also posted a bearish crossover with the last bar falling below zero in the mid-day trading session on Monday.

Author

Ali Mortazavi

Errante

BEc, CMSA, Member of IFTA - International Federation of Technical Analysis, Associate Member of STA - Society of Technical Analysis (UK).

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