EUR/USD: Time for sellers to step in, risk-reward appealing

Sellers have a clear task in the next 48h, and that is, to fix the slight trouble they find themselves inby approaching the second half of the week with the price back above 1.13. On a weekly basis, sellers must re-take the upper hand and close below to keep the unambiguous bearish bias.

On the daily chart, the downcycle is clear, acceptance sub 1.13 was found even if the extension fell short in magnitude from the previous leg down (for now). This market must soon find sellers willing to engage at the next levels of high interest at 1.1353 and 1.1395, which would make for some great risk-reward as the horizontal level aligns with the dominant cycle.

The latest 2 corrective legs up have come amid a smart-money acceleration based on the increase of tick volume as the first stage out of many hurdles in the Brexit deal has gone through. With regards to correlations, we’ve seen a pick up in German vs US yield spreads but further deterioration in the German vs Italian spread. Watch the interaction of price at the key decision areas 1.1350 & 1.1395/1.14 as that will give us the next clues for a directional move.