The EURUSD is challenging parity. The daily chart trades between the lower blue and red bands in its bearish area. Notably, its stochastic is in its lower quintile (green rectangle). The longer it maintains this position, the greater the chance of lower prices. Moreover, the downside volatility is expanding per the diverging Bollinger bands (black ellipses).
The dollar is potentially setting up for its next swing high. If this charts, parity won't hold, and we will see a lower EURUSD. To this end, the hourly chart on the right will be helpful. The S2 pivot is the critical short-term support. However, the trend-following EMAs are bearish (black ellipse). If the short-term stochastic falls below 20 (blue arrow) and holds, the EURUSD's support will come under pressure.
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.