Fade the Euro Rally?
Skerdian Meta • 2 min read
Yesterday the Euro had another terrible day as EUR/USD broke the 1.08 support level and fell close to the next support level at 1.07. I knew it wasn´t going to be a good day for the single currency and the Euro pairs since the forex market opened for the Tokyo trading session because the Euro opened with a 20 pip gap lower.
The market tends to close these sorts of gaps in the early hours of the morning after it opens. But the Euro buyers were nowhere to be seen yesterday and the slide further down reconfirmed the bearish bias that the market had towards it.
This morning, though, the Euro buyers seem to be back from the long weekend. The Euro has jumped about 70 pips in the last couple of hours and it has moved above the 20 and 50 simple moving averages (SMAs) in the hourly EUR/USD chart.
I can´t see any apparent reason why this sudden jump has happened, but my gut feeling is telling me to sell EUR/USD just up here around 1.0812. We went with the gut feeling last evening when we opened the NZD/USD signal which hit the take profit target overnight, but the stochastic indicator and the 50 SMA were in our favor too.
There still some way until the 20 SMA in gray, but we sold EUR/USD anyway.
Personally, I would have preferred to have entered short at the 20 MA on the H4 forex chart which stands around 1.0835, but the price just stalled at 1.0817 so we decided to pull the trigger right there. To me, this is just position adjustment and some profit taking by forex traders ahead of the big figure at 1.07.
Once this is over, down we will go as the EUR/USD faces the floor again. The problem is that you never know how long these short squeezes will last and how far up they will push. But for now, the price has stalled in this forex pair and, in fact, it´s sliding down as I type. Here comes another winning forex signal…