The EURUSD daily chart is weak, between the lower blue and red bands. Moreover, the red bands have expanded with the currency pair's downside swing (green rectangles). Yesterday saw a long blue candle, and there has been some follow-through today, leaving the price at the border between the weak and neutral areas (blue arrow). Given the increase in volatility from the broader downside move, this rally may provide an opportunity. To this end, we regard the EURUSD hourly chart on the right. Price has approached the R1 pivot resistance. If this acts as a reaction level, the trend-following indicators and hourly stochastic (black ellipses) will need to turn down as a signal of weakness. If these happen, a movement by the stochastic to the 20 area may suggest that bears are targeting the two-day rally.
FXCM Research Team
FXCM Research Team consists of a number of FXCM's Market and Product Specialists.
Articles published by FXCM Research Team generally have numerous contributors and aim to provide general Educational and Informative content on Market News and Products.