EURUSD lowest in 12 years at 1.128. Market price had been forming lower highs and lower lows, this showed that the market is still in a downtrend. Any counter trend trading would not be advisable as the strength of the downtrend is relatively strong. This could be seen by the ADX and the number of bearish candles in the current trend. In the coming week, we would expect to see the release of several news such as the Spanish Unemployment claims, US unemployment claims and US non-farm payroll. Prior to high impact news, it is advisable to reassess your current trading plan to ensure that you are in a better position.
On the W1 chart, it was seen that the market was relatively strong towards the downside. This was shown by the ADX and low number of reversal candles seen in the downtrend. The market price had broken 1.129 but had retraced back to the level as a resistance. If a continuation signal is seen to form, there might be an opportunity to continue with the flow of the trend towards the downside and may see the price support below 1.090.
Last month, we saw the price broke 1.210 and supported at 1.294. The current price level was the lowest since September 2003 where the key support is 1.100. ADX indicated the possibility that the market may be exhausted and may see a slightly bearish sideway movement of the market. This would also be an indication that that the market is waiting for a news release and we may see a reduction in volatility.