Looking at weekly chart of EURUSD once can see how much and how aggressive the sell off has been for EUR this year after failing to trade higher through April & May. We've seen 2 interest rate cuts this year which has sped up the fall of EUR.
As Price has been dropping we have been nearing a Major long term level of support. Take a good look at the monthly chart and notice what Price did on two prior occasions at the 200sma level. We had a Major correction at this point. The weekly candles have been indicating this slow down. Last weeks candle closed BEARISH ENGULFING after two indecisive candles, clearly indicating that sentiment was still favouring further lows.
HOWEVER, The weekly candle failed to close lower than the prior week. This indicates that the bias is starting to change from overall net short to near term bulls as more and more sellers exit their positions as they head into this monthly support level.
It is when you drop down to the Daily time-frame that you notice the indecision that has started to creep into the picture over the past couple of weeks. There has been no clear entry low on either the weekly or daily charts. We would require to break and close lower of support we saw in early November to indicate further selling entries.
For now Price is consolidative. There is alot of fundamental data out this week in the shape of GDP QoQ and YoY stats for most of the Majors. I'd stand aside this week and wait for Price to show us where the sentiment lies going into December next week.
USD Prelim GDP q/q figures to be announced shortly this afternoon is one such factor to watch this week.
