Tomasz Wisniewski
Axiory Global Ltd.
One day before the Federal Open Market Committee (FOMC), EURUSD enters a full selling mode, making a strong bearish statement. The price successfully broke major supports and is free to reach new long-term lows.
It all started two weeks ago, when the EURUSD broke major resistances, creating hope for buyers. As we later found out, that breakout was a false one (red) and at the beginning of the previous week, the EURUSD came back below those resistances, crashing the whole bullish dream.
False breakouts are usually amazing signals to trade in the opposite direction. It’s not different in this case either.
In addition, the price created a flag pattern (black) and today, we finally managed to break its lower line. That is the last piece of the puzzle. The price is back below the down trendline (blue), back below the 1.138 resistance (yellow) and now, below the lower line of the flag. All is set for a further bearish slide.
“Buy the rumors, sell the facts”, did you hear that one before? This can be a factor that can derail the bearish plan though. Currently, the USD is being bought in anticipation of the FOMC. Once, the Federal Reserve (Fed) delivers what is generally expected, we may see the “sell the facts” part of this quote, which in the case is of the EURUSD would mean an upswing. As always, we’re about to find out what’s going to happen but as for now, technically sellers are in a much better position.
Trading FX/CFDs on margin bears a high level of risk, and may not be suitable for all investors. Before deciding to trade FX/CFDs you should carefully consider your investment objectives, level of experience, and risk appetite. You can sustain significant loss.
Recommended Content
Editors’ Picks
EUR/USD stays below 1.0700 ahead of US data
EUR/USD stays in a consolidation phase slightly below 1.0700 in the European session on Wednesday. Upbeat IFO sentiment data from Germany helps the Euro hold its ground as market focus shifts to US Durable Goods Orders data.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold manages to hold above $2,300
Gold struggles to stage a rebound following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% ahead of US data, not allowing XAU/USD to gain traction.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.