FxWirePro: EUR/USD back in range as bears resume their business, use rallies for fresh shorts, no room for long term bulls

On a broader perspective, long term trend is back in range of 1.09 to 1.16 level that has been persisting since February 2015 (see monthly charts).

The euro has begun the week with trading some gains but it is not advisable to perceive this as an opportunity for longs, as the pair break below major supports at 1.1198 and 1.1104 levels with huge volumes formations (see daily charts).

Bears lined up as Euro retreaded below 1.0911 levels on Friday, many turned panicky on Thursday’s crucial voting of Brexit votes, that is where you can observe it has rejected the stiff resistance at 1.1376 levels (see Thursday’s candle).

RSI (14) on both daily and monthly charts are converging to the slumps being bearish bias (Currently, daily RSI trending below at 40 levels while articulating). This technical indication has started evaluating the momentum when prices touched 1.16 levels by taking the computation of last 14 day periods the magnitude of recent gains to recent losses in an attempt to signifying the overbought pressures.

While %D crossover on the daily chart is evidenced on the slow stochastic curve with every price dips. Stochastic on monthly curve also evidence %D crossover to signify weakness in the euro.

The pair has broken major support by forming bearish candle with the huge real body to slip below DMAs that shows the intensity of the bearish sentiments as you could also trace out 7DMA crosses below 21DMA.

Hence, in near terms, we still project the pair to retest below or around 1.09 trajectories, a cyclical low of 1.08 during Q3 2016. As of now, we foresee no signs of considerable recoveries for long-term investors.