Aug 02, 2009 – 09:15 AM GMT
EUR/USD could retrace to 1.4190 based on the following factors:
- RSI on hourly above 70
- Intrepidus FX Sell Signal
- EUR/USD is up based on technical break of the hourly channel (see chart 1 below)
- Profit taking on EUR/USD longs
- 1.43 is an established daily high since may (see chart 2)
- Same logic applies on USD/CHF Long
What could cause it to go higher?
- A continued selling off of the USD
Daily EUR/USD with established high near 1.4335
* EUR/USD back and forth price action was not impressive until the better than expected US GDP release was met by a negative equity reaction which sent EUR under 1.41. After digesting the data, which included benchmark revisions, equities took back losses and EUR bounced. The advance accelerated into the 16:00bst month end fix as EUR reached 1.4180. When USD bids nowhere to be found in thin post fixing activity EUR/USD extended to 1.4279 before it ran out of steam.
This is not a recommendation to sell EUR/USD. It means that when the market opens if EUR/USD fails to break through the high, selling could continue to fibo levels and hourly trendline. If EUR/USD breaks the 1.4279 high, expect it to go much higher initially.
There is a lot of fundamental pressure short USD at the moment, so if this is not a short term top, expect the EUR to explode.
By Joe Gelet
http://eliteeservices.net/ Elite E Services FX Systems See more articles at www.eliteforexblog.com
Elite E Services is an electronic boutique brokerage specializing in currency trading, intelligence, and technology surrounding foreign exchange markets. EES offers FX trading systems for clients and investors, FX consulting, technology and tools for trading, system development, custom programming, and FX solutions for businesses.
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