Technical Market Overview:
Despite the Bearish Engulfing candlestick pattern made at the level of 1.1040 the bulls have managed to make a new local high at the level of 1.1118. Another Bearish Engulfing has been made around this level and this time it might be more effective. The market conditions are now overbought despite the positive and strong momentum, so the downtrend might start to be continued any time soon.
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.
