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EUR/USD Retreats from 1.39 and Breaks Last Week's Trendline

After a brief tag of 1.3905, the EUR/USD remained mostly below 1.39 to end last week. This week, the pair started with a dip and is trading around 1.3850 as we get into the Asian 4/14 session.

(eurusd 1h chart, 4/14)

The 1H chart shows the market breaking below last week's rising trendline, and the stochastic dipping below 20, which represents intra-session oversold condition.

If there is some further dip, the previous resistance pivot at 1.3820 might provide support, especially if you see a bullish divergence in the stochastic.

Also note that the 38.2% retracement level is at 1.3815, adding to the case that we should see some support in the 1.3810-1.3820 area if the EUR/USD is indeed bullish.

The bullish scenario suggests that EUR/USD is poised to test and possibly break the 1.3966, 2014-high.

(eurusd daily chart, 4/14)

As you can see, the daily chart shows that the prevailing bullish trend is still intact. Other, than some choppiness, there are no signs the EUR/USD is even getting ready for a consolidation.

Still with the daily stochastic showing overbought condition, we should anticipate a session or two of bearish correction.