Hugo
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Hugo in HTO Trading,

EURUSD: Taking a breath or the bears left the market?

The dollar pullback has been minor, so far. I suspect is may have a little more room to run, but anticipate a hawkish read to the FOMC minutes that will be released in today in the NY afternoon.

We are seeing the largest bullish correction in EURUSD that we have seen in months. That alone would be enough to give us pause but the pair is now above its 10-day moving average in a highly oversold environment. While the daily trend still remains strongly bearish the short-term trend is in danger of becoming bullish with a break above 1.2700.

Expecting upward move to 1.2868 on a break above the previous day high at 1.2681 (scenario 1) or a break below the previous day low at 1.2583 could push the pair to a daily support at 1.2389 (scenario 2).