Bearish Divergence On EURUSD
FХ Strategist & Financial Commentator
During the second half of May, this pair has showed a powerful bullish rally, bringing the quotes nearby the peak set in the beginning of March, around 1.15 area, within a long-term trading range that is characterizing Euro Dollar during the last 12 months of trading.
During the first part of the week we had a new acceleration with a new top set on Wednesday while on yesterday session the bearish correction has finally arrived, with a sharp drop towards 1.13 area and the formation of a bearish marubozu candle.
Looking at the RSI indicator, we can detect a perfect bearish divergence, that combined with the strong resistance around 1.1400 area, could favour a technical correction. Talking about the Average True Range is slightly rising over the last two weeks and in my opinion this pair should be pretty active during the second half of June.
The setup would be activated with the breakdown of yesterday’s bottom at 1.1280. The stop loss must be place at 1.1430 above Wednesday’s top, while the target price can be predicted around 1.1130 around last May tops area.
As always I recommend to trade carefully and to plan at best every move. Don’t forget to subscribe to NBH Markets’ YouTube Channel to stay up to date with the financial markets! Have a good trading and see you for the next video.