Forex News: The US Dollar continued to strengthen yesterday and the pair was dominated by the bears who managed to break the support at 1.1945 as previously anticipated.
The current bias is clearly bearish but the pair has travelled a long distance to the south without a proper pullback and now the Relative Strength Index and Stochastic have both entered oversold. These are signs that point towards a move up during today’s trading session but as long as the pair remains below the 50 EMA, we favour the downside after the said pullback is complete.
Today we have another slow day from a fundamental standpoint, without any major economic releases for the Euro or US Dollar.
After moving once again above 1.3550, yesterday the pair finally broke the level as well as the 50 period Exponential Moving Average, indicating that the balance of power is tilting towards the short side.
At the time of writing the pair is showing good downside momentum and the 50 EMA seems broken with authority. Unless price quickly reverses and moves above the EMA, we expect to see a break of the support at 1.3500, which if it happens will most likely bring in additional sellers, making 1.3450 the next target.
The British Manufacturing Production will be today’s only notable release, scheduled at 9:30 am GMT. The report shows changes in the total value of goods generated by the manufacturing sector and usually has a medium but positive impact on the Pound if the actual reading surpasses estimates. Today’s forecast is a change of 0.3% compared to the previous 0.1%.
Written by: Bogdan Giulvezan
The article above is based on the writer’s 8-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.