EUR USD Technical Analysis | EUR USD Trading: 2015-05-21 | IFCM
IFC Markets Online CFD Broker

EUR USD Technical Analysis - EUR USD Trading: 2015-05-21

Bearish divergence

Let us consider the major currency pair EURUSD. After advancing for the previous five weeks euro is set to record a weekly loss against the dollar by the end of the current week. The US dollar rebounded this week as positive US housing data and the remark by European Central Bank board member Benoit Coeure about increased euro-zone bond purchases in May and June lifted the dollar against euro. Euro lost about 1.5% against the dollar on Tuesday, recording its worst one-day loss since March 19.The Greek bailout impasse also weighs on the shared currency. On Wednesday Greek government’s parliamentary speaker said Greece won’t be able to make a payment to the International Monetary Fund on June 5 unless an agreement is reached with its creditors. The medium term outlook for euro is bearish: ECB quantitative easing program was launched just over two months ago on March 9 to stave off deflation by purchasing monthly 60 billion euros worth of bonds issued by euro area central governments and institutions until at least September 2016. The steady expansion of monetary base will continue exerting downward pressure on euro. On Friday IFO business climate indicators for May are expected to come out in Germany weaker than the previous month. Also on Friday the consumer price index for April will be released in US, and the tentative outlook is negative. Later in the day at 15:30 CET ECB President Draghi speaks at an ECB forum on central banking in Portugal, and at 19:00 CET Fed Chair Yellen will speak on US economic outlook in Rhode Island.

EURUSD

EURUSD has been falling the last three sessions after a correction spell that lasted for the past five weeks. The pair started falling after a bearish divergence formed on RSI-Bars chart. The RSI-Bars oscillator indicates downtrend. The Parabolic indicator also gives a sell signal. The lower Donchian channel has also tilted downward. We expect the bearish momentum will prevail and the breach of lower Donchain channel at 1.1062 followed by closing below it will signify the resumption of the downward movement. A pending order to sell can be placed below that level, with the stop loss at the upper Donchian channel at 1.14659, which is confirmed also by the last fractal high and Parabolic indicators. After pending order placing, the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop loss level without reaching the order, we recommend cancelling the position: the market sustains internal changes which were not considered.

PositionSell
Sell stopbelow 1.1062
Stop lossabove 1.14659
IFCM Trading Academy - New era in Forex education
Pass Your Course:
  • Get Certificate
trading academy

The best trading conditions and high-level services for our clients

We are ready to assist you on any issue 24 hours a day.

Note:
This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.

Close support
Call to Skype Call to WhatsApp Call to telegram Call Back Call to messenger