EURUSD Technical Analysis for May 16, 2013

The EURUSD continues to weaken and it is possible that we may see further downside in this pair, in the coming sessions.

Last week, the EURUSD broke with great force the psychological support (now resistance) at 1.30, opening the way to fall to the next support level at 1.2770. This hypothesis had set last week and because this pair is oversold on “small” charts, it is very possible that the EURUSD found strong support at the 1.2770 level and start to move in a low range. Economic data this week in the EURUSD has been mixed but the overall situation in the eurozone, yet remains “not favorable” and that uncertainty is what has led to this pair to be too bearish this week. It is not advisable to open buy orders at the moment, because the trend is very clear on this pair: bearish.

Moreover, we must consider that this bearish outlook has been supported by the triple top pattern has formed on the daily chart, finding resistance at the 200 day moving average. The MACD indicator remains in negative territory, supporting our bearish outlook for EURUSD.

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