Bearish signals for the EUR/USD in Q3 and for last week have been confirmed, investors selling the market to post a 2nd lower weekly high and low in a row and a loss of over 1 Big Fig on the week overall. While prices are trading below their 100 & 200 day average rates, daily sentiment is oversold from close to a 38% pullback to the entire 2013-2014 gains, as well as from close to this year’s base posted in February at 1.3477.
Signals are pointing to the potential for a bounce at these levels and Friday’s daily Hammer is supporting this view. However, it should be limited and temporary, so with this in mind, the outlook for this week is to sell modestly on the open and then at 1.3589, Thursday’s open, with a stop loss at 1.3652, the 2 week high. Targets are to 1.3491, Friday’s low, 1.3420 and 1.3369, a deeper 50% correction.
