Strong bearish signal has pushed the EUR-USD deep to oversold position, but is it going to stop soon when the Euro Zone market open or continue going down until the US session open during the ADP non-farm payroll news release.
All technical indicators such as MACD and stochastic still showing fairly strong bearish in all major time frames (daily, weekly, monthly). Approximately 400 pips or about 400% down from the previous Monday position. This means the long-term downtrend is very much underway with minor hurdles along the way.
Using the oversold position and Indicators signal we can assume the following.
- Oversold position = The market is looking for correction as some traders might be taking profits on this level
- MACD & Stochastic Down = It will go further down if traders choose not to take their profits yet.
Based on MACD and Stochastic signals i have the feeling that the euro-dollar may continue to move down even when the Euro Zone market open. This is because some traders might still believe in the signals given by the indicators since it is very strong and ignore the correction hint. However during the ADP Non Farm payroll news release the market is expected to have a brief pause here. And this could be it, the point of correction will take place. So we will see what the European traders will do.!!
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