The EUR/USD continues to consolidate between a defined range and a sell signal has popped up on the daily chart.
When looking to the daily chart, a consolidation of the EUR/USD should be apparent with the pair trading between the range of 1.3450 and a rising short term trend line off of the November low.
Further signs of consolidation can be seen from the flat 20-day simple moving average line that comes in today at 1.3220. The ADX-14 is relatively flat at 25, signaling a weak trend. This sets up an opportunity to short the pair in-line with the long term downtrend that is found when looking to the long term charts.
The daily chart shows two bearish signals; the first being the bearish cross on the slow stochastic oscillator, the second being the shaved top from yesterday’s candlestick as the pair has been sold from the opening bell in Asia.
Supports for the pair can be found at the 20-day moving average at 1.3220, followed by the rising support line from the November lows at 1.3100. Further support may be the 200-day moving average at 1.3055 and the November low at 1.2970.
Resistance is located at 1.3450. A breach above the 1.3500 level could trigger further EUR/USD buying until the resistance at 1.3785.
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Russell Glaser is a Currency Analyst with ForexYard. Russell provides analysis in the FX spot market by employing fundamental research methodologies. In addition to currencies, Russell closely follows the correlation between the Commodities market and the movement of equities. His writings have been published on the ForexYard Trading Blog and associated partner sites. Prior to joining Forexyard, Russell Glaser served as a management consultant in the financial services industry, advising Fortune 100 companies. Russell holds a degree in finance from the Fisher College of Business at The Ohio State University.
