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In the previous EUR/USD review we noted the forex gaps were still happening, an indication of market turmoil. Both SMA 20 and SMA 50 were pointing downwards and it was an indication of a bearish possibility. An interesting point to note is that the SMA 200 is flattening too from it’s upwards stance. 1.34 might be a strong support. Fundamentally the much speculated Operation Twist by the US Federal Reserve was announced but little fanfare was seen. In the meanwhile, the Euro Zone continued to face the threat of a Greek default and further complications related to the budget deficit crisis.



Technical Analysis

Looking at the EUR/USD chart above we note that the 1.34 line held as a support. Having said so we could see multiple attempts to break the floor and this is an indication of a strong bearish pressure.

SMA 20 = downwards

SMA 50 = downwards

With both SMAs still pointing downwards, the possibility of a continued bearish momentum is high. It is also important to note that the SMA 200 is rounding the top to become downwards soon. As an indicator for long term trend, such a development will further add to the possibility of a sustained bearish momentum.

Watch out for the SMA 20 to act as a resistance and a failure of 1.34 may bring about 1.32/1.3

Continue on to for the fundamental analysis of the EUR/USD Weekly Review to understand more about the underlying market sentiments.

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