EUR/USD Bearish Beneath The 1.1700 Handle
Shain Vernier • 1 min read
The EUR/USD is continuing its bearish march, taking out the 1.1700 handle. Following Wednesday’s daily Doji candlestick pattern, forex players have piled on to the short side of this market. For now, a key long-term support area is coming into view.
On the economic news front, it was a fairly light morning. Wednesday’s headlines revolved around the FOMC Minutes and Fed tapering. Today’s headlines are much less impactful:
Event Actual Projected Previous
Continuing Jobless Claims 2.820M 2.800M 2.899M
Initial Jobless Claims 348K 363K 377K
Philly Fed Manufacturing Index (August) 19.4 23.0 21.9
At this point, the weekly jobless claims figures aren’t being viewed by EUR/USD traders as overly important. But, they are down modestly week-over-week, which is positive. On the other hand, the Philly Fed Index disappointed expectations in August. The lagging performance is attributable to commodity supply chain disruptions and labor shortages.
For the EUR/USD, the trend is down. Let’s dig into the long-term technicals and see if we can spot a trade or two.
EUR/USD Posts New Yearly Lows
Bottom Line: Typically, long-term technical levels set up nicely as support or resistance. In this case, the weekly Double Bottom (1.1602-1.1612) from fall 2020 is such a level.
Until elected, I’ll have buy orders queued up in the EUR/USD from 1.1619. With an initial stop loss at 1.1564, this trade produces 55 pips on a standard 1:1 risk vs reward ratio.