Price action still looks extremely heavy on the EUR/USD, which has been taken down to recent lows. The short-lived bounces suggests the pair still faces prospects of fresher bearish legs ahead after the first attempt to bursts through this week's descending trendline at 1.2835 has been a crashing failure. The spot rate saw a very timid consolidation at intra-day highs followed by a retest of earlier lows at 1.2815.
Technically, Chris Capre, Founder at 2nd Skies, do not see downside pressure abating much: "Over the weekend, the EURUSD gapped down and has not even come close to filling it, selling off for now 8+ consecutive 4hr candles. This is quite a lot of consecutive 4hr candles to close bearish and approaching the historical maximum of 10. Could it break this all time max? Certainly, and now would be the most likely time. However, we do not want to chase the trend at this moment and prefer to trade pullbacks."
Thus, as suggested by Chris, his approach is to look for price action pullbacks to the dynamic resistance and 20ema on the 4hr chart which has held price below it since May 2nd: "Unless some silver bullet comes out to save Europe (which we don’t see) or Greece does a 180 and decides to keep the debt-slavery going (I mean austerity package terms), then we expect any and all rallies to be opportunities to sell the pair for an eventual break of 1.2821 and the medium term target of 1.2650 or the 2012 yearly lows" Chris comments.
Technically, Chris Capre, Founder at 2nd Skies, do not see downside pressure abating much: "Over the weekend, the EURUSD gapped down and has not even come close to filling it, selling off for now 8+ consecutive 4hr candles. This is quite a lot of consecutive 4hr candles to close bearish and approaching the historical maximum of 10. Could it break this all time max? Certainly, and now would be the most likely time. However, we do not want to chase the trend at this moment and prefer to trade pullbacks."
Thus, as suggested by Chris, his approach is to look for price action pullbacks to the dynamic resistance and 20ema on the 4hr chart which has held price below it since May 2nd: "Unless some silver bullet comes out to save Europe (which we don’t see) or Greece does a 180 and decides to keep the debt-slavery going (I mean austerity package terms), then we expect any and all rallies to be opportunities to sell the pair for an eventual break of 1.2821 and the medium term target of 1.2650 or the 2012 yearly lows" Chris comments.
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