Currently the EURO:USD has started a down trend. We can support this fact by looking at the red squares on the chart we have lower lows and lower highs in the market so down trend is confirmed. Looking at possibly futures for price action our eurousd pair has an RSI over 60 percent based on that knowledge we can predict where this pair wants to head.
The black line which is very unlikely is that overnight before 8:00 gmt when the market is still inactive, predicts that the RSI of the eurousd will reach above 70 and enter the overbought zone. This route is very unlikely before 8:00 GMT but once the market becomes active the likelihood will rise.
The red line suggest that trend will break current structure support at the red line and then test the previous structure support at the orange line and ultimately fail. A break and close above the orange line would suggest a bullish reversal which is highly unlikely especially with the ECB taking a dovish stance on rate hikes.
The blue line suggest that because of the markets previous bullish bounce from the support at the 1.6134 the retrace will occur within the next few candles allowing the bears to resume control of the eurousd market possibly pushing the trend down to 1.61500 levels. This route is very likely because the RSI is approaching "Overbought on the 14day and 10 day RSI", the market is currently at the start of bearish reversal that occurred last week after our long impulsive move down. Our trend is creating lower lows and lower highs indicating the bears are in control.
Our job has traders is not to tell where the market is going but to make predictions based off facts and analysis.
Comment
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Entry: 16878
Trade active
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Euro enters overbought zone with a RSI of 70 on the hourly, looks like incoming rejection. Position still open took profits at 16800 but left half of the position open at 16800. Educational purposes only~
Trade closed: target reached
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Lol its safe to say targets were reached beyond expectation, I did not expect euro to go over the overbought zone and take the path of the blue line down. But again our job as traders is to make prediction based off facts and analysis good luck trading!