Since having a daily close below the 200-day, 100-day and 50-day SMA, euro-dollar has plummeted 200 pips towards 1.3420. The bearish trend is firmly in place and even Goldman Sachs announced a change to a more weaker euro bias. A dovish Federal Reserve might not be enough to prevent this key move. The short-term key resistance level will be whether or not we see a daily close above the psychological 1.3500 level.
Both weekly and monthly charts are displaying significant lower highs and we should not be surprised if we eventually do see 1.30 tentatively breached this summer. The current structure supports further downside, but we may see 1.2900 prove to be important support. It is likely we will have to wait till the ECB acts in September or October before we see one last major collapse towards 1.2500.
The trade: Sell EURUSD at 1.3440 with a stop loss at 1.3520 and a take profit at 1.3200. The Risk/Reward Ratio is 1:3
Edward J. Moya
WorldWideMarkets Online Trading