EURUSD Pair Has Negative Bias to the Downside...Be CautiousBy looking at the 4-hour chart and the daily chart, the EUR/USD currency pair has taken a turn to the upside. The pair had rebounded from 1.1211 a hair below our hypothesized bullish entry point of 1.1215. The pair had a 2.5% probability of falling lower than our hypothesized support area. However, we deduced that for something like that to happen, there would have had to be some kind of dovish catalytic speech/sentiment uttered by the European central bank president Draghi or similar dovish news.
Therefore, we suspected that sooner or later the pair would attempt to claw back to its hypothesized moving average of 1.1506, but before that happened, the EUR/USD pair would’ve had to elevate toward our 1.1215 mark, which it did. Now, we are convinced that it will continue in the short term toward our next hypothesized target of 1.1361 before it finally gets back to its moving average sweet spot of 1.1506.
There is a strong possibility that the pair could surpass its hypothesized moving average of 1.1506 and continue toward our next target of 1.1652 and possibly 1.1798, but this is as far as the pair will go up the charts because fundamentally, the Euro zone economy is weak, and the Eurozone’s economic cycle is nearing its peak. In fact, the EU economy is already acting as if it has commenced its recession cycle.
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