- EUR/USD Daily Technical Outlook - Apr 20, - EUR/USD Daily Technical Outlook - Apr 20,

Postby SignalTrader » Wed Apr 20, 2011 4:57 am

Technical Overview:
In the last 2 days, EUR/USD tumbled more than 300 pips just to recover more than half of the loss, gaining more than 200 from the bottom. This technical behavior may signal one of the two: either the bearish short term momentum was a clear first sign of a medium term trend reversal or it was a psychological selloff, providing a good opportunity to go long. Should it is real – then the current rebound of the pair is a tremendous short opportunity. If it is not – the pair should stabilize above 1.44.
In our opinion, the sign IS real and the current level offers a great sell opportunity.

On the Daily chart, we can clearly see that for the first time in the last 4 months, the lower band of the upward channel failed to block the bears. From now on, it will be a resistance level and should block any bullish attempts to return into the channel.
On the Hourly chart the picture is bearish as well. Both the RSI and ADX indicators are signaling a reversal downward.



Trading Idea:
Best levels to enter SHORT positions are between 1.438 and 1.44. First target is at 1.426, where at least half of the position should be cleared. Second target is at 1.415. Third target is at 1.402.
Stop loss should be located at around 1.445.
LONG positions should be taken by breaking above 1.453 with a stop loss at 1.448 and take profit at 1.461.

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