Technical Market Overview:
The bulls have managed to push the prices towards the level of 1.1250, which is the key mid-term technical resistance level. The Bearish Engulfing candlestick pattern has been made at this level as well, which indicates a possible trend reversal on EUR/USD. Moreover, there is a clear bearish divergence between the price and momentum oscillator in overbought market conditions, so the move down might occur any time now. Please keep an eye on the black trendline support and technical support level located at 1.1091 - 1.1065.
Weekly Pivot Points:
WR3 - 1.1388
WR2 - 1.1223
WR1 - 1.1151
Weekly Pivot - 1.0973
WS1 - 1.0899
WS2 - 1.0724
WS3 - 1.0648
Trading Recommendations:
Despite the recent strong rally on EUR/USD the best strategy for current market conditions is the same as it was for last week: trade with the larger timeframe trend, which is down. All upward moves will be treated as local corrections in the downtrend. The downtrend is valid as long as it is terminated or the level of 1.1445 clearly violated. There is an Ending Diagonal price pattern visible on the larger timeframes like weekly, which indicates a possible downtrend termination soon. The key short-term levels are technical support at the level of 1.0778 and the technical resistance at the level of 1.1267.
