After Friday's weakening of the euro against the dollar, the risks of a break in the trend and a fall to the 1.1086 minimum from 3rd September are up.

Alpari: Trading Ideas

Short-term Trading Idea FX EUR/USD Bear Speculation: Taking Over Thursday's Candle

Trading opportunities for currency pair:
After Friday's weakening of the euro against the dollar, the risks of a break in the trend and a fall to the 1.1086 minimum from 3rd September are up. A close of the day above 1.1350 will cancel out the scenario.

Background:
The last idea on the EUR/USD came out on 13th April. A renewal of the 1.0461 minimum was supposed to leave me expecting the euro to fall to 1.0200 and to 1.0070 by the end of November.

As soon as the idea was published, the euro/dollar started to form a double bottom price level. US and Eurozone economic indicators came out mixed with some good and some bad. Due to this, the euro/dollar moved into a correctional phase. A 9-figure corridor was formed.

Due to the stock market indices crumbling, on 24th August the euro/dollar got back to 1.1712. When the situation stabilized, the euro returned to 1.1086. The euro then gained against the dollar due to expectations changing with regards to the US Fed putting up its rates. On 17th September, the euro/dollar rose to 1.1459 and on Friday it lost all its gains.

What's of interest at the moment?
I didn't want to do a trading idea today on the euro, but after Friday's close the currency had a reverse candle pattern against all major currencies. On Friday in the second half of the day, the dollar rose after the ECB's Benoît Cœuré and the Bank of England's chief economist, Andrew Haldane, made speeches. Coeure announced that the ECB is ready to extend its quantitative easing measures where necessary and Haldane said that any next move by the BoE with regards to interest rates could see them lowered.

With each word, the dollar gained back Friday's losses on the euro. For the sellers to get the situation under control, it will take them having to strengthen below 1.1213. After a break in the trend line, we could see the rate falling to 1.1086 again.

On Monday the market often moves against Friday. The euro has broken from the resistance zone. If you're looking to sell euros, wait for the LB at 1.1340/50. If the euro/dollar lifts above 1.1350 then it'd be worth staving off sales since the risks of a depart above 1.1460 will increase. The forecast I've made below shows what I'm looking to see.

EURUSD

Vladislav Antonov, Analis Alpari