More Downside Ahead For The Euro

Quote of the day:“The world tolerates conceit from those who are successful, but not from anybody else.” ~ John Blake

Good morning. The ugly gets uglier for the euro as it just reached a 10-year low against the Japanese yen at 100.75 and extended its decline against the dollar to a fresh multi-month low at 1.3165 before pulling back to intraday highs around 1.3220 while writing this. Short-term resistance starts around this week’s opening level at 1.3350 and is followed by 1.3430/50 and 1.3530/50 – as seen below:

EURUSD

Looks very bearish as long as it trades below 1.3350. However, it would remain bearish even in case of a rally to 1.3530, so don’t expect any miracles: rallies, breakdowns = new selling opportunities.

Euro Vs US Dollar Chart 4hrs 10-4-2011

Euro Vs US Dollar Chart 4hrs 10-4-2011

EURJPY

102.00/50 is where to expect the sellers to re-enter the game

Euro Vs Japanese Yen Chart 4hrs 10-4-2011

Euro Vs Japanese Yen Chart 4hrs 10-4-2011

AUDNZD

The short setup signaled by the reversal pin bar, as noted in my post yesterday, looks good so far. I think there’s more downside to be seen, retesting recent bottom support. 

Australian Dollar Vs New Zealand Dollar Chart Daily 10-4-2011

Australian Dollar Vs New Zealand Dollar Chart Daily 10-4-2011

EURGBP

.8635 was indeed a good level to join the bears on yesterday’s short-lived pullback, as I wrote in my previous report. Now .8600 is where to look for new opportunities.

Euro vs British Pound Chart 4hrs 10-4-2011

Euro vs British Pound Chart 4hrs 10-4-2011

EURCAD

This doesn’t look like the common retracement so I think it’s worth to consider new selling opportunities either on a failed test of 1.3930/50 or on a break below recent bottom at 1.3850

Euro Vs Canadian Dollar Chart 4hrs 10-4-2011

Euro Vs Canadian Dollar Chart 4hrs 10-4-2011

Have a great day and good luck trading!

6 thoughts on “More Downside Ahead For The Euro

  1. Charlie

    Hi Liviu,

    EURUSD doesn't give a short opportunity and the pair keeps falling. If you don't hold the open position, what would you do, ride a running horse or keep waiting for the retracement?

    Thanks
    Charlie

    Reply
    1. liviu Post author

      hi Charlie

      when the downtrend is so strong and the bad news keep coming, it's unlikely to see a decent retracement so it's just fine to sell at any levels (not using some 20-30 pip stops, of course)
      The smaller time frame charts are where to look for selling levels in strong downtrends, while chances for a retracement to last few days are slim
      Breakdowns are working fine on hourly chart since breaching 1.35

      Reply
  2. Pingback: Euro Recovers, Still Below Resistance | innerfx.com

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>