Article originally published on innerfx.com and republished here with permission
Quote of the day: “Consistency requires you to be as ignorant today as you were a year ago.” ~ Bernard Berenson
Good morning. The euro is trading lower after weeks of apparent calm in Europe, as focus in back on the debt crisis now that policymakers return from summer breaks. Some important data releases of the economic calendar today are the US Initial Jobless Claims and ISM Manufacturing. Now let’s see some charts of interest:
Support formed by the rising trendline is broken and selling on the break lower was – and still is – a good plan (see my yesterday’s post). Now keep an eye on the next downside objective around 1.4300 if 1.4350/60 fails. I remain bearish on EUR, planning to sell on corrective rallies or weakness.
There are some signs of exhaustion near .8900 where EUR changed direction recently (see the previous 2 reversal candles). I think it’s worth to consider selling at these levels with a stop above yesterday’s top
Support is under pressure today so it’s best to be extra careful if you’re one of the recent bulls. Although I’d prefer a buying scenario, I don’t think it’s the best option at this level – until there’ll be a good reason for the uptrend to resume. Technically – I’d like to see the EUR back above 1.1750 in order to become more confident
Moving lower towards important support, as noted in my previous report. I think there’s some more downside to be seen and best thing to do for now is to look for new selling opportunities on potential rallies to 1.41 or sell on break below 1.400. It looks just too heavy…
One former support level is currently being tested near 96, followed by the downward trendline a bit higher. Looking for selling opportunities in the 96-97 area might do the trick.