It´s true that the Euro pairs have been trading in an uptrend since the beginning of the year, with EUR/USD leading the way. Although, we might reach a top soon, judging from the price action recently.
The price was having trouble crossing the 1.1270-80 level last week and during the second half of the week, this forex pair retraced about 120 pips from the top. A correction was due on the H4 chart and it happened.
Since Friday afternoon though, the price has been climbing higher and we´re back above 1.12 now, targeting the 100 SMA on the H1 forex chart.
But, we are still holding a bearish view of EUR/USD for the near term. I think that the pullback of the bigger uptrend, which started in January, is still not finished.
The daily forex chart is heading down and there´s still a lot of room to run until the technical indicators become oversold. The daily and weekly chart look even more bearish as they are both severely overbought.
So, in my opinion, a bigger correction is due and that´s the reason that we are bearish for the short term. We´re looking to open a sell forex signal soon, but I´m eyeing the 5 SMA (yellow) on the H4 chart, which is a dozen pips above where we are right now.
Stochastic is becoming overbought
As you can see from the forex chart above, the stochastic indicator is becoming overbought, so I´m itching to pull the trigger. Although, I will wait for a higher price at the 50 SMA.
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