Is EURUSD preparing for 1.02?


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.


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.


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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