After a monthly report on U.S. employment completely incoherent (new posts nearly 5 times less numerous than expected, but the unemployment rate falling to 9% as against 9.5% consensus - main reasons: the weather and likely out of the workforce), and especially the prospect of rising interest rates in Europe that depart somewhat after Trichet's speech last Thursday, the euro could pause . Not to mention the really disappointing retail sales in the EU.
I no longer trade the pair for quite a month for personal reasons and then because I tend to prefer short positions (not that I have a particular interest for that), but if I come to this conclusion is that the signs of reversal are very many, simply wait for a confirmation at the beginning of the week. Remains to be seen whether the confirmation will come ... These signs, here.
First, I notice the shaped configuration of the evening star, bearish formation, especially when
comes after a long climb as is the case. In weekly (not shown here), the candlestick indicates a clear failure of the bull. Furthermore, the oscillators are turned downward, confirming the appearance of the curve.
The situation was not so bad for the single currency on Friday, so I have no confidence that the euro will continue this trend. Tomorrow, I expect a test of the lower reaches $ 1.3540 on Friday. If the market were to go down this support, it is highly likely that the major level of $ 1.3500 was tested in the day: here are my confirmation of trend reversal.
In fact, converge on 1.3500 key support of 1.3500 (psychological level which is more) and moving average and 20 sessions.
If this level breaks, I expect a continued downward trend is observed today, with 1.3333 $ 1.3250 and the line of sight. Then, everything is imaginable, because 1.3250 is a relatively solid.
If passage above 1.3600 Bulls can breathe, otherwise take Warning!
I also point out that China is emerging from a full week off for the changeover to the year of the rabbit and the return of players from the Middle Kingdom to foreign exchange reserves could have huge influence.
For the meeting this Monday, February 7, focus on EUR / USD (pending confirmation), but also on Corn (the highest annual closing WEC) & Wheat Futures. Finally, note that the WTI dropped below $ 90, very clear negative sign, but it will remain cautious until the situation remains tense as in Egypt and the Arab world in general.
Good trades, see you soon!
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