Is there a new wave of euro weakness coming to the charts now? Well, it seems so, as the EURUSD is currently making new weekly lows. Obviously, part of the blame goes to the weaker than expected CPI, but this is only partly to blame, as this data is from yesterday and the initial reaction wasn’t so catastrophic. Anyway, a sell signal for the euro is definitely supported by the technical situation and this will be the focus of today’s analysis.
First of all, let’s look at EURUSD, where we’re seeing a breakout of the lower line of the pennant formation (black). In this case, the pennant is a trend continuation pattern and should end with a decline. The target for this movement is at the lows from the 1st of August, and the chances of getting there are very high.
A bearish setup can be also spotted on the EURCAD pair. We warned you about this occasion few days ago. In the long term, the price has bounced from two important resistances. In the short term. EURCAD has broken the crucial support and is now using it as the closest resistance. The contact with the resistance looks promising for the sellers as we are experiencing a bounce. Current market conditions are promoting a further drop.
The last instrument is bitcoin, which few days ago broke the mid-term upwards trend line but failed to break the horizontal support at 9,400 USD (blue). That was used for a bounce and a comeback above the dynamic support. With that reversal, the sentiment on bitcoin is positive. By the way, BTC has recently been reinventing itself as a sort of safe haven asset, which has the potential to protect us from the global recession. It’s an interesting concept,but we’ll have to wait and see how it works out in the future.