Is EURUSD preparing for 1.02?

Dollar index at important short-term junction before the FOMC
December 14, 2015
Σε κομβικό σημείο το ΧΑ
December 16, 2015

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During November I have been avoiding selling EURUSD as I was looking at the bullish wedge formation that broke upwards after Mario Draghi’s latest comments on the QE programme that spiked EURUSD towards 1.1050. Now I believe it is time to turn Dollar bullish again although many will argue that the FOMC rate hike is already priced in. Technically we have reached an important resistance area where the rejection will start the next downward move towards new lows. The FOMC and the rate hike will only be the causation of this big downward move.

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In the short-term price is holding above the kijun-sen (yellow line indicator) and above the black upward sloping trend line support. 1.0920-1.0940 is important short-term support. If broken we should expect EURUSD to push towards 1.08 at least.

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With overbought stochastic at the daily chart and price right below the Ichimoku cloud resistance with rejection signs, I prefer to be short EURUSD at current levels with a stop at 1.1150. This big upward bounce could very well be a wave 4 bounce as long as we do not overlap the August lows.

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Alexandros Yfantis
Alexandros Yfantis

Fascinated by financial markets, studied International Securities Investment and Banking in the UK, works as a Portfolio Manager in Greece and runs a technical analysis website. Enjoys travelling and spending time with his family and preparing for the black belt in Korean Karate.