By: Doug Rosen
On Friday we broke a price channel we the EUR/USD has been trapped to the upside and I was really expecting price to continue onward a bit before dropping but at the same time price was touched by the daily 13 ema that caused the bulls to take profit forcing price back down. I expect price to continue on its bearish path, however, price gapped around 80 pips over the weekend and I am watching for the gap to be filled before price continues downward. Price does look very bearish though and it could be this gap will not be filled but may be just a slight retracement, we will just have to see. Normally I expect the weekend gaps to fill but the daily 5 ema is at 1.3720 and price closed at around 1.3794 on Friday.
Adding to that the 4 hour 5 ema is around 1.3700 and the monthly M0 is just above that so there is just way too much in the way for price to fill the gap completely. If price were to retrace I would expect it to go to around 1.3720 then to head back down since there is a lot of resistance in that area. The new weekly Central Pivot Point is at 1.3738 and the hourly 13 ema is at 1.3710.
At the time I am doing this analysis price is just 15 pips above the weekly M2 so it would not be too inconceivable that price would just continue upward a bit to the region between the 1.3715 - 1.3735 area then continue downward on its bearish path. Narrowing things down a bit further the 15 minute 55 ema is at 1.3715 which also happens to be between the 38.2 and 50.0 fib of the recent drop. So watch for price to drift to the 1.3715 - 1.3735 area then to continue its way downward.
See how this market analysis translated into profitable trades here.