Selling the Retrace in EUR/USD at the 100 SMA
Skerdian Meta • 1 min read
EUR/USD has been bullish for several months, as the USD turned weaker across the board, while the Euro was attracting bids on the other hand. The climb was quite strong, with EUR/USD surging more than 12 cents higher, moving above 1.19, but it failed to reach the big round level at 1.20.
This forex pair climbed to 1.1960s by the middle of August, but it reversed down and it hasn’t been able to make any new highs since then. That is a sign that the buying pressure has declined now and sellers are gaining control, as highs get lower during retraces higher.
Since yesterday, we have seen another retrace higher on the H1 chart, but buyers were running out of steam at the 100 SMA (green), which had provided resistance for this pair last week. A bearish reversing pattern formed below that moving average, with some doji and upside-down hammer candlesticks. We decided to open a sell EUR/USD signal and now we are in profit, as the bearish reversal is underway.