EURUSD: 1.4203
Short-Term Trend: sideways
Outlook: A week ago I thought EUR was likely to break higher abv the 1.4530/40 level. Well, it reached that level, but couldn't break above it (probably the worst possible situation for a trader: to see a breakout only to see it can't hold). The failure to hold abv the 1.4540 produced a sharp move lower later in the week and EUR plunged below 1.4200 on Friday. Now, there is a strong sell signal from the daily Stochastics and considering the sideways nature of the daily chart, further decline is favored. The question is how lower EUR can go. If the previous Diametric is still valid, then it will find a bottom abv 1.4055 and will head higher again. If the count presented above is unfolding, then the odds favor weakness all the way down to 1.3520. Right now I favore the bearish case and only a move abv 1.4390 will make me think different.
You can also take a look at my latest video where I explain my method of using protective stops:
Strategy: Trading from short side is favored as long as prices stay below 1.4390. Target=1.3520.
About the author: Alexander Nikolov
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