The pair dropped almost 160 pips without much of a correction and has already dropped a substantial amount this morning.
Daily Outlook: The pair is now struggling with the bottom of the bearish channel around 1.3090 (see yesterday's daily chart for the longer-view). The trend channel has held since mid-February and been tested 4 times on the daily charts but I would not be surprised at all to see it broken today as the selling pressure remains strong on the pair.
I am bearish, bearish and bearish (sounds like a law firm) on the EUR/USD right now. Despite being at the channel support I see no reason to look for longs and will continue to look to sell on rallies.
Trading Idea: If we see a bounce off this support the most conservative trade would be a short off of 1.3400 - strong intraday resistance, or even 1.3260 (strong hourly resistance). A trade more realistic to get tripped today is a short off of 1.3200 with a candlestick signal. From 1.3200 short targets are 1.3170, 1.3140 and 1.3110 for 90 pips profit.
If we do see a downward break of the support channel (currently 1.3090) that opens up 1.3050 and 1.2990.
REMINDER: I am traveling this week and won't be available in the forums below. I will respond to emails the week of the 10th.
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