On 4-hour chart for EUR/USD we are seeing a bearish divergence of the relative strength index (RSI) and CCI indicators. The current overall trend remains bullish as long as the rising trendline is intact, currently around 1.1654 . Any pullback might accelerate if we break below this rising trendline
Caution: Possible signs of exhaustion and reversal or consolidation -- Bearish divergence on RSI & CCI -- Exhaustion of the bullish trend -- Data is still showing US Growth is strong and still supporting the US Dollar while EURO has been on the weaker side -- Turkey and ITALY are still an issue for the EURO .
My Possible trade:
EURUSD SELL:
Entry range : 1.1730 to 1.1695
Exit1 Range : 1.1660 to 1.1650 Exit2 Range : 1.1647 to 1.1579
StopLoss: 1.1755
Cancel the trade if EURUSD breaks and closes above 1.1745 to 1.1754
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I think the EURUSD Bulls ( EURUSD Chickens as i call them ) will attempt to vigorously defend the bullish rising trendline
Some will simply be on the side and wait for a pull back to the 1.1500s. They got a good rally already. They can book some juicy profits .So watch out for volatile price action until this Friday plus its month end and every major FX player needs to settle their books
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Usually when Data suggest a weaker EURUSD but the EURO keeps rallying that indicates a violent Bearish trend ( Pullback) might be forming .
Data from EURO areas in the last 2 weeks indicates weakening EURO zone growth and the data shows it while we have seen in the US the growth is still strong .
So the question is: Why is the EURUSD rallying anyway ?
-- is it the Dollar weakening due to Geopolitics not data? -- is it 10 Year Note yields at 2.900s % ? -- Is it month End fixing ? -- are some " BIG BOYS " protecting a very huge FX option level ? -- Fundamentals and Price Action , show no reason why EURUSD might have further strength past 1.1750 -- Even the old technical indicators indicate an overstretched EURUSD Rally?
IMO! i don't see any reason why EURUSD would rally past 1.1750 . May be some genius out in the world can let us know but Data does not lie
When US GDP Q2 beats the market consensus and the EURUSD only moves 6 pips , you know there is something going underneath the price action that is usually different than what we traders expect.
US Dollar Index has been dropping like a stone so expect EURUSD to still grind up but i am not yet convinced that it has enough momentum to take out 1.1754 and then head for 1.1790 where we will declare the start of an actual Bullish Trend
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the most likely reason why EURUSD is not moving an inch is because we have a huge month end FX Options expiry on friday 31st Aug 2018 at 10:00 am New York Time (EST)
There is a total of 2.29bn for EURUSD today and 3.43bn just at 1.1700/20.
The 3.43Bn FX Option expiry at 1.1700/20 would explain why the price keeps dropping and then pulled back by the FX Options expiry magnet to 1.1700/20 area .
IMO! if that's the case then we might camp here until tomorrow the the BIG boys are defending a no touch FX options but if its a touch FX option then they will be paid handsomely and they can just let the EURUSD drop now since they have driven it up enough to touch the strike price of the FX option
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The Month end Rollercoster continues with US Dollar troubles
Up 30 pips Down 30 pips then Sideways and the cycle keeps repeating itself over and over
we are stuck between 1.1675 to 1.1715
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Something has to give ! Either EURUSD is going completely collapse or rally
When German HICP is below expectation at 1.9 and consensus is 2.0 and it moves just 3 pips . it tells me something different is going on with the Price Actions we expect
US GDP was good the EURUSD did move 6 pips German's HICP was worse than expect and EURUSD only move 3 pips
-- A big FX Option expiry for 3.43bn tomorrow and Month End FIX
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EURUSD finally collapsed
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A Storm of bad news makes EURUSD grind lower into 1.1580s area
-- Disappointing Consumer Price Index (CPI) in the Eurozone, -- Great NAFTA headlines for US and Canada -- Month end flows.
I was looking at EURAUD and EURGBP..they are both at saturation point with bearish divergence on 4H. Adding to your FM analysis i think next week we'll see bears take full control of EUR and ride it to 1500's
saalaah
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can we expect further collapse today friday and next week towards 1500's?
-- Tariffs issues continues
-- ITALY, Argentina & Turkey issues continue
-- And US data keeps over performing will EU data disappoints.
-- Any new geopolitical issues affecting US & EU
If things get worse then we might retest 1.1500 Level otherwise i think we might rebound again but for now since its friday and Month end . We have Large FX Options expiry of 3.43Bn at 1.1700/20 area at 10am NY time , i think we will have a lot of volatility since the BIG BOYS have come to play .
" LOTS of PRICE ACTION" ---UPs and DOWNs quick movements and no particular trend