The euro had a break down on Thursday and Friday. Why? Well, Europe is a mess – with the huge number of immigrants from the Middle East, the European Central Bank hinting at more QE, and exceptionally high unemployment.
Technically? Well, let’s look at the charts, starting with the EURUSD monthly.
Since July 2014, there has been selling volume (indicated by the lower magenta arrow) as price exited the Hawkeye Zones (the upper magenta arrow), red selling volume continued and Hawkeye Trend went to bearish.
In the weekly chart we can see that since early August the euro has been in congestion (indicated by the cyan arrow), price went to the Hawkeye stops (indicated by the magenta arrow) – which, as I have pointed out many times, is an area of resistance.
On Friday Hawkeye showed selling volume, and is now indicating a further bias to the downside.
The daily chart shows us how price has tested the Hawkeye Zones and been rejected (indicated by the upper magenta arrows), volume has been short all week (indicated by the lower magenta arrow), and the Wide Bar (indicated by the yellow arrow) has been taken out with a lower close on Friday.
Weakness across all time frames. Look for support at the Zone areas shown on all time frames, but a test of the monthly Hawkeye Zone area is on the cards.
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Understanding Price and Volume: Now that’s trading!
[The cyan and magenta arrows are for illustration only and do not form part of the software]