EUR/USD Forecast: downward pressure increases

20.05.2014 14:34:58

The EUR/USD extends its weekly decline posting a lower low of 1.3677 with European opening, having so far bounced some, yet holding around Monday low. Euro decline however, has been contained by the lack of local news but dollar and yen are mostly up across the board amid stocks trading again in red. 

The EUR/USD 4 hours chart shows bearish pressure building up as indicators cross their midlines down and price extended below 20 SMA, yet critical support around 1.3640/60 remains so far untouched. The level stands as the neckline of a daily double roof figure, while several daily highs and lows since past September 2013 converge around it, reinforcing its strength. Suspect stops below it are large so if broken, the selloff can be rough: 1.3590/1.3600 area comes as immediate target, followed later by 1.3545. A daily close below the 1.3640/60 area, however, should anticipated a continued slide for the days to come.

To the upside, there are no big changes despite yesterday’s spike up to 1.3733, with price needing to break above 1.3745 to be able to get rid of the bearish tone and attempt a recovery towards 1.3780.