EURUSD Bear Rally Set To Fire Back Up (D)
Created on Thursday, 26 November 2015 01:13
Written by Austin Galt
Since previous analysis, price has continued lower but the general outlook remains unchanged. That calls for a substantial move higher that will ultimately end the bear rally.
Let’s analyse the daily chart.
EURUSD DAILY CHART
The PSAR indicator is the tight setting and shows the previous bullish break to be a fake out which is not uncommon with this setting. The dots are still above price at 1.0719 indicating a bearish bias. The next break above will be solid in my opinion.
The Bollinger Bands show the low was back at the lower band and traded slightly below which is a common feature at solid lows.
The RSI shows multiple bullish divergences accompanying this low.
The MACD indicator is bullish.
The low yesterday at 1.0566 clipped the 88.6% Fibonacci retracement level so a deep retracement which is consistent with choppy price behaviour so often found during corrective phases.
The horizontal line denotes support from the first higher low and stands at 1.0520. Price trading below there would likely indicate a move to new lows. I doubt that at this stage.
Also, while not shown, I have some monthly PSAR support around 1.0535 which I expect to hold.
Summing up, I still expect one last surge higher to end the corrective phase and I expect it imminently.