This week, although EURUSD price gains to the current levels of 1.0628 levels from the lows of 1.0552 levels, interim bulls are still lingering near 1-year lows to create space for more slumps as the long lasting major non-directional trend is now turning into bears favor.
The spot reference is at 1.0629 which is just 113 pips away from 1-year lows (i.e. 1.0516).
When you see this week's price gains in this pair, the puzzling questions should strike sensible investors’ or traders’ mind, “Is there substantiation from any other indicator? Don’t we have to compare the prevailing upswings with the major trend?”
Well, that’s why we eye on snapping rallies to deploy fresh shorts as there are no traces of indications of the uptrend, instead, figure out the selling momentum and bearish crossover on SMAs.
RSI remains near oversold territory and still indicates slight indecisiveness in the prevailing downtrend but with convincing strength in declining trend.
Stochastic curves also remain below oversold zone but still signals indecisiveness as there is no convincing traces of %K crossover.
MACD’s bearish crossover indicates more slumps on cards.
Most importantly, please be noted the massive volumes formation on declining prices, it is well in conformity to the bearish trend (refer monthly charts).
Well, overall the dollar also remained largely cushioned by rising U.S. government bond yields and the dollar gaining traction on account of three fundamental factors.
Firstly, worries that the OPEC-inspired higher oil price will generate additional US inflation and hence further Fed hikes, Secondly, the hopes of ramped up fiscal stimulus once Donald Trump becomes president, lastly, favorable economic data flashes.
Although the intraday rallies are encouraged in EURUSD, we see stiff resistance near 1.07, hence, more slumps in the upcoming weeks are foreseen.
