The hourly EUR/USD chart shows a bearish divergence between price and the RSI at the recent high. The big selloff immediately afterward confirms the divergence which signals a top is in place. The outlook for the euro moving forward is very bearish.
How a Simple Line Can Improve Your Trading Success
Today's big bearish candlestick in the euro signals the larger downtrend has resumed as long as today's losses are not completely reversed tomorrow. I was cautious on the rally before since it was so oversold prior to that, and the reversal higher looked like it might have legs and run higher for a while. Now it looks like the euro is headed lower in the short term, although it's probably a wave 5 at some degree so I would still be mildly cautious and not be too aggressively short at the moment. The daily charts are showing a bullish divergence building, but it might not materialize in a sustained rally for quite a long time. Regardless, the short term is bearish so I added short near 1.2700, but not nearly a full position. I still have plenty of cash to add short if it rallies from here. Any rally should be capped shy of 1.2824.
PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.