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Wednesday, July 8

EUR/USD Signal Trend Analysis

Weekly Trend direction: Short

Weekly trend reversal level: 1.4200

Key resistance levels: 1.4000/20, 1.4040, 1.4080

Today's trade suggestion:

The holiday on Friday was a non-event and the euro remained weak against the dollar. This means that we now have a weak close to last week, with a “dark cloud cover” candle pattern highlighting the weakness. For this reason, we have chosen to trade this week short, whilst below the weekly reversal level at 1.4200. Clear resistance lies just above at 1.4000/20 – the 38.2% Fibonacci retracement level and the underside of the (now broken) rising trend line. If this level doesn’t hold, allow for a further rally to circa 1.4080 before re-selling the euro. Target for short trades at this stage is 1.3750 and then 1.3500.

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