Technical Analysis, lets go short. for FX_IDC:EURUSD by Forex_Roads

The establishment of the downward direction of prices is evident in the recent price chart. Paying attention to the upward trend line , it is obvious that from the moment it broken from the exchange rates, it did not maintain its limits because the prices did not return within it. The evolution of this fact is the development of a trend channel in which prices are falling.


Observing the support and resistance levels as well as the Fibonacci levels, a lag in the downward dynamic of the last days is obvious, which nevertheless is expected. However, this development following the events creates an irritation in the market participants and gives the impression that the exchange rate is looking to find its way. The formation of the spinning top that was created in Friday’s session may be a result of that nervousness. The most important part of the analysis is the sideways trend channel that has been created and the consequence with which the values follow the levels that have been created. In particular, the downtrend was stopped at exactly 61.8 FR at 1.1900 creating a strong psychological support level at this point as it was tested twice, and the prices failed to break it. Also, a strong resistance that has been tested twice and is still maintained is that of 1.1985 which coincides with 50.0FR. However, the secondary trend that has been created will give the necessary rest to the market participants. Also, from this study emerge some significant levels of resistance a) 1.2080, b) 1.2175 as well as support a) 1.1860, b) 1.1630 and c) 1.2000.


The conclusion that emerges from the averages used to detect the direction of the trend, white and green averages, is the positive difference in their sign which indicates the beginning of the downward direction of prices. Another indication, apart from the support-resistance levels, for the lag of the downward dynamic is the path followed by the average which smoothes the price noise, yellow average, and as it seems the path followed through the bodies of the candles prevents the possibility of safe sell order. The deviation of the Bollinger Bands and in particular, the wide deviation of the lower band leaves enough room in the scenario for prices to fall to lower levels. An additional factor that currently needs time to develop is the momentum that the MACD has which is currently relatively small.


Summarizing the technical analysis , the most common scenario is that of placing a sell order. But there are three factors that must be fulfilled. First, breaking the support level of 61.8 FR at 1.1900, which is a very important psychological limit, is imperative. Second, the price must be below the yellow average, it acts as a short-term trend line . Third, the MACD must acquire a significant momentum, which also indicates the momentum of the trend, and lead faster to the required result.

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