EUR/USD Is Officially Bearish Now After Breaking the 200 Daily SMA
It seems like EUR/USD has ran its course, after being bullish for most of 2020. It climbed around 15 cents from the bottom, up to 1.2350s in the first week of January this year. But, the situation started to reverse and EUR/USD was the first pair to retreat lower.
The price started slipping lower, but it wasn’t certain whether tis was a retrace before the next move higher or if it wa s a real trend reversal. The break of the 50 SMA (yellow) wasn’t really the sign for the bearish reversal, because the price found support at the 100 daily SMA (green) and bounced off that moving average.
But, the fact that the 50 SMA turned into resistance after the bounce was the sign sellers needed. Sellers pushed below the 100 SMA early this month, which was another bearish sign, but the 200 SMA (purple) turned into support this time.
Although, the area around 1.20 turned into resistance again which was yet another bearish signal. But, the ultimate bearish sign was the break of the 200 SMA (purple) yesterday, which opens the door for the September/October lows at 1.16 now. We have turned bearish on the Euro now, so we will wait for a retrace up to the 200 SMA and probably open sell forex signal there.
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