EUR/USD: short term negative sentiment

Forex technical analysis / EUR/USD / Our expecattions:

Short-term negative sentiment after the formation of a pin bar below 50SMA and diagonal resistance. The price below the base of the pin bar creates a downside movement probability that will probably go to test the support area between 1.1620 and 1.1715. A Head and Shoulders formation is also likely to appear. At the moment, short positions do not have a good risk/reward ratio, as we have to wait for a price close to the diagonal resistance. For short positions the stop must be above the last peak of 1,1880 at 1,1900 levels.

Alternative scenario: At a weekly chart the price seems to go to test the horizontal support area. The bullish engulfing bar above 200SMA supports the likelihood that negative sentiment will be short-lived and that the upward trend for now remains active. If the price breaks the support zone below 1.1620, we can expect a strong downward impulse. Possibilities for long positions can be searched in the locked zone between 1.1620 and 1.1715 with a suitable signal of Japanese candlesticks with stop 1.16.

Trader Nikolay Georgiev

Read more:

• EURGBP close to a potential buy zone
• EURNZD a possibility for short positions
• EURJPY a signal for probable upcoming buy opportunity
• A new TRY appreciation remains under question
• EURNZD a possibility for new short positions