Richard Perry
Independent Analyst
A bearish key one day reversal is a negative signal on the euro and complicates the outlook for a recovery. There was a significant swing in sentiment yesterday with the initial upside break turning round at $1.1050 and downside pressure accelerating in the afternoon to close below the previous low. The turnaround came as FOMC member (a reputed dove on the committee) stated that there an interest rate hike was possible in the June, July and September meetings, which saw the dollar subsequently strengthen across the board. This has seen the daily momentum indicators just threaten to roll over now which gives the bulls something to think about. The hourly chart shows there has been a break back below the pivotal $1.0900 level which had been building as support. The key one day reversal on the daily chart is the first real signal that questions the bull control. I am now looking at the uptrend on the hourly chart to suggest whether there is something more to it and it is under serious pressure as the European session is getting going. The uptrend currently comes in around $1.0830. A failure to get back above $1.0900 will add to the downside pressure on the euro. Below $1.0766 opens downside towards $1.0650.
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