Article originally published on innerfx.com and republished here with permission
Quote of the day: “Ability will never catch up with the demand for it.” ~ Malcolm Forbes
Good morning. The euro is in free fall testing bids near 1.3400 in risk-off trade. The dollar is recovering against its majors and there are some fresh breakouts to watch these days.
Last move towards 1.3850 where price reversed 3 days ago was, indeed, corrective – as mentioned in my Monday article. I remain bearish on EUR and I would consider rallies new selling opportunities.
Well, support at 1.59 was finally breached, though I reckon Friday’s rally was a bit confusing – making the whole thing look like a bull flag formation. Anyway, the exit out of such prolonged consolidation areas usually turn violent due to tons of stop-loss orders not too far away from the range, in both sides. I am expecting the decline to continue and if price pulls back to the upside, former support at 1.59 is where sellers are probably waiting for new opportunities.
Current breakout looks better than last one (of November 9th) and the US dollar seems ready to build support above 1.0200/50.
Support around 1.44 remained intact and buying dips near range’s bottom wasn’t a bad idea, but what now? Well, Resistance is under pressure as the CHF is losing ground across the board – so you shouldn’t be too surprised if resistance at 1.4550 breaks soon.
Median retracement value of last up leg has been breached, so it’s time to look lower – at 76.50, which was a reversal point both as support and resistance and is also the 62% fib of the recovery from 72 to 83.95. While stock markets go down – AUD goes down, since it is one of the most risk sensitive currency – but I guess most of you know that. I remain bearish and 76 – 76.50 is where I’m currently looking for an upside pullback to start, eventually.
Different chart – (almost the) same story, just that it seem to lag behind AUDJPY which already breached lower, below the 50% support. Well, if current sentiment won’t change, thus AUDJPY continuing the decline towards 76-76.50, we may expect the Aussie’s breakdown against the greenback to be quite violent. Should be interesting to keep an eye on how this unfolds.
This is all for now. By the way, if you’re one of the hundreds of millions
who spend a lot of time on facebook, you may want to like this page, as it seems a bit quiet these days. Thanks in advance, have a great day and good luck trading.