Why do markets ever make it easy for the analyst? ( I take that back. The last few months have been pretty easy…). Today’s price action is particularly inconclusive. We had a shot at putting in a ringing bottom on the charts with a sustained move through trendline resistance at 1.2440 but instead we now have to deal with a certain amount of indecision.
On the bright side for the bulls, we trade right at the 10-day moving average at 1.2365 with the average pulling out of its dive and leveling off.
If we manage a late-day rally, to my mind a close above the sharp downtrend will signal the worst has passed for the time being and some backing and filling toward recent 1.2670 highs will play out. Holding the 50% Fibo of the 0.8225/1.6040 rally is important and suggests a bounce is ahead, IF we can add another cent or so before the close.
If not, it is too early to call off the dogs in EUR/USD just yet.
