LOOKING TO SELL RALLIES INTO 10/20-DAY SMAs
Eur/Usd: Medium-term technical studies show the potential for a top carving after the market posted fresh yearly highs by 1.4450 on August 5. A shooting star weekly formation (week of 09 high) has been followed by a weekly lower high and lower low, with the market continuing to track lower into the current week. As such, we like the idea of looking for opportunities to sell the major in anticipation of additional weakness over the medium-term. However, market conditions remain quite choppy, and any shorts taken, will only be done on overbought intraday rallies. The 10/20-Day SMAs coincide and currently come in just over 1.4200 and we will look for these moving averages to cap gains ahead of some bearish resumption. STRATEGY: SELL @1.4210 FOR AN OPEN OBJECTIVE, STOP @1.4380. RECOMMENDATION TO BE REMOVED IF NOT TRIGGERED BY NY CLOSE (5PM ET) ON TUESDAY.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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