The EURUSD daily chart remains anchored in its bearish area between the lower blue and red bands (blue arrow)—this position despite a rally yesterday. Furthermore, daily momentum is also biased to the downside, as the stochastic remains in its lower quintile (red rectangle). The longer it maintains this position, the more downside pressure exerts on the currency pair.
Yesterday's rally was a 50% retracement of the EURUSD's last leg down. This price action may be the proverbial rally in the downtrend. The hourly chart shows that the trend-following EMAs have crossed down (black ellipse). The hourly stochastic also threatens to drop below 20 (green rectangle). If it does, it will be considered a bearish development.
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.