EUR/USD Reversed Back Down Below the 50 Daily SMA

The EUR/USD was very bullish for most of last year, climbing from 1.08 in March, to above 1.23 by the first week of January, as the USD kept declining lower. But, the decline in the USD stalled in January, and we saw a reversal below 1.20 by the first week of February.

The 100 SMA (green) turned into support on the daily chart, holding the decline. Then, the EUR/USD bounced off this moving average and climbed around 300 pips higher this month, moving above the 50 SMA (yellow) yesterday.

But, we saw a quick reversal, and yesterday’s candlestick closed as an upside-down pin, which is a bearish reversing signal. Today’s signal already looks quite bearish, so sellers are in control again. This shows that the buyers couldn’t resume the bullish trend. Now the EUR/USD is heading down, but we will see if the 100 SMA will hold again when the price gets down there. If it breaks, it will be the end of the 1-year bullish trend.