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18 Sep 2013
EUR/USD is a sell on rallies - FXA
FXstreet.com (Barcelona) - Looking at the EUR/USD near term, David Solin, who is the Founder of FXA, thinks "any further near term gains would likely be limited" on the basis of the following factors explained below.
From Solin: "Failure to build on the Aug upside break above the June high at 1.3415 and quick reversal lower (slowing upside momentum/topping), the sloppy/messy trade since the March low at 1.2750 (characteristic of a correction, with eventual new lows), and the view of an even larger period of correcting from the July 2012 low at 1.2045 all argue that any further near term gains would likely be limited, and part of a much larger period of wide ranging."
Immediate resistance for the pair, according to Solin, may be taken "at the bearish trendline from Feb (currently at 1.3410/20), the Aug 20th high at 1.3450 and the rising trendline from June (currently just above at 1.3470/85), while nearby support is seen at the bullish trendline from the Sept 6th low (currently at 1.3310/25)" the Trader said.
Despite Solin's bearish outlook, the risks of being wiped out on Wed's FOMC announcement remains high, thus why he recommends to stay on the sidelines for now, waiting for a better entry level ahead.
Solin, in a final note, added: "There is some risk for spike higher on tomorrow's announcement, but would be wary of a false break of one of the key resistance levels mentioned above (reversing to close back below)."
From Solin: "Failure to build on the Aug upside break above the June high at 1.3415 and quick reversal lower (slowing upside momentum/topping), the sloppy/messy trade since the March low at 1.2750 (characteristic of a correction, with eventual new lows), and the view of an even larger period of correcting from the July 2012 low at 1.2045 all argue that any further near term gains would likely be limited, and part of a much larger period of wide ranging."
Immediate resistance for the pair, according to Solin, may be taken "at the bearish trendline from Feb (currently at 1.3410/20), the Aug 20th high at 1.3450 and the rising trendline from June (currently just above at 1.3470/85), while nearby support is seen at the bullish trendline from the Sept 6th low (currently at 1.3310/25)" the Trader said.
Despite Solin's bearish outlook, the risks of being wiped out on Wed's FOMC announcement remains high, thus why he recommends to stay on the sidelines for now, waiting for a better entry level ahead.
Solin, in a final note, added: "There is some risk for spike higher on tomorrow's announcement, but would be wary of a false break of one of the key resistance levels mentioned above (reversing to close back below)."