EUR/USD: Risk of Bearish Continuation As Techs, Valuation Stand

Judging by the top-down analysis, buyers remain embroiled in a difficult situation as sellers remain in control of the daily and weekly price action. While the hourly has now entered a consolidation phase after the creation of a double intraday resistance just ahead of 1.1550, it will be quite a challenge for buyers to recover much ground as technicals and valuations stand. Find below the factors supporting a continuation of the downward trend.

- Momentum playing out after a bearish engulfing bar on the weekly chart.
- Relatively void area of technical support until levels sub 1.14 are tested.
- Correlated assets (Italian bond yields & German vs US bond yield spread) are both underpinning further downside.
- Last Wednesday's bearish outside day continuation pattern still playing out after back-to-back bullish corrective days on Thursday and Friday.
- The latest successful rotation in the hourly was to the downside. keeping the bearish structure
- Most importantly, the latest swing low qualifies as better in quality (more speed) and magnitude (larger move), suggesting a downside resolution of the current range.

Note: Each scenario has been prepared without taking into account your objectives, financial situation, needs or trading plan. The information presented is only intended to provide our very own views on the potential market direction. We conduct a diligent process of analyzing markets from an institutional perspective after the accumulation of a decade-long experience studying charts. Before acting on any information or advice, you should consider the appropriateness of it having regard to your circumstances. Please read our Financial Services Guide and current offer document which is available to be downloaded from www.globalprime.com.au

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