EURUSD: Bears are out hunting

This is one of those occasions when it is better to listen to Mr. Market then try rationalize what Mr. Market is saying. Couple of bearish signs for the EURUSD:

in the immediate timeframe, the EURUSD has broken down from a channel formation with a downside target of 1.12 (c.-70bps)


*Channels are generally continuation patterns so the medium term outlook would be an ABCD completion from the Feb'18 peak of 1.25. Implied downside target is 1.09 (c.-340bps) which suggest a retest of the 2015 to 2017 congestion/trough.


*The retest of the 2015 to 2017 congestion zone would be crucial for the EURUSD as the Feb'18 peak bounced off a ultra long-term downtrend line from 2003. A breakdown from the congestion zone would imply significant downside risk as the Feb'18 peak was a 61.8% retracement from Apr'14 peak at 1.38.

Again, it is not going to be a straight line nor is it a certainty. I think Bill Gross once said "find a wave and surf it". Happy hunting.