EUR/USD Is Sending Currency Bears Message

Recently, official data showed that euro zone industrial production declined by 0.8% in Feb (month-on-month), missing analysts' forecasts. Additionally, industrial production (year to year) rose less-than-expected in Feb, which pushed the euro lower against the greenback. As a result, EUR/USD declined under the Feb high, invalidating earlier breakout. How low could the exchange go in the coming days?

In our opinion, the following forex trading positions are justified - summary:

EUR/USD: short (stop-loss order at 1.1512; initial downside target at 1.0572)

GBP/USD: none

USD/JPY: none

USD/CAD: none

USD/CHF: none

AUD/USD: none

EUR/USD

Yesterday, we wrote:

(...) although EUR/USD moved little higher, the pair remains under the key orange resistance zone. Therefore, in our opinion, as long as there won't be a breakout above it and the red rising resistance line (based on the Apr and Jul 2015 lows), further improvement is not likely to be seen.

From today's point of view, we see that the above-mentioned key resistance zone stopped currency bulls once again, triggering a pullback. With this drop the exchange rate slipped under the Feb high, invalidating earlier breakout, which is a negative signal that suggests further deterioration. Additionally, the CCI and Stochastic Oscillator are very close to generating sell signals, which increases the probability of further declines.

********

Courtesy of http://www.sunshineprofits.com/