After 28 higher highs and higher lows the pair seemed to end this rally and created some hope for a reversal. Over the last two weeks a head and shoulders formation started to create and most of us were expecting to see the confirmation for the much-awaited reversal.
Today EUR/USD broke the 1.4000 barrier and, even if some are still hoping into a reversal, the head and shoulder formations seems to fade away.
As in my last EUR/USD talk, I will still keep my bearish outlook, although the chances to see it's confirmation are really slim. A move above 1.4080 on a daily basis will create the premises for a new rally, resistance being around 1.4500.
Bear in mind that Feds rate decision is awaited for this week and this creates a major psychological impact over the market.
My suggestion is not to open any position right now and keep a close eye on EUR/USD on the next days until the new trend, bearish or bullish, is fully confirmed.
Tuesday, November 2, 2010