The EURUSD has dropped over the last five trading sessions from 1.0321 to 1.0170, a decline of 1.46%. This has pushed the price from its bullish zone. Today's candlestick (still to complete) threatens to move into the bearish area between the lower blue and red bands.
The chart on the right shows the EURUSD hourly timeframe. Price is at central pivot resistance P, which overlaps with price resistance (red shaded horizontal). Thus, this is a critical test for hourly price action.
Given the drop in the daily time frame, the hourly bias is to the downside. In this regard, the stochastic is near the 20 levels (blue arrow). The longer it maintains this position, the more downward momentum pressure will be applied to the currency pair. We also note that the hourly trend following EMAs are in bearish formation. If these develop angle and separation to the downside, the price will be heading lower.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.