18.12.2022 EUR/USD Technical analysis (Daily timeframe)

Chart EUR/USD

Technical analysis purely on the price action is simple for this week. EUR/USD may found the medium-term top and then a correction is expected. I would recommend to enter your short positions, when the price tests broken level. Be patient and decisive.  Another scenario is that price will stay between 2 current levels (marked as "Resistence" and "Current support"). To have better chance of predicting the right next move of the price check out also another indicators down below. 

MACD EUR/USD

As you can see on the picture, MACD struggles to move up with the price. This difference could be taken as a small divergence. Don’t forget that divergence is valid after price breaks current trendline. MACD is also in decline now, which is signal for short positions. 

RSI EUR/USD

RSI did reached overbought area on RSI (more than 70) and as history shows this could be also another indication of the top. On RSI be careful around value 50, where the price can bounce and continue in uptrend. Until then we can use other tools.

Volumes EUR/USD

Volumes are on a decline, which could indicate less interest in short positions, this is in favor of smaller correction and staying in uptrend.

Bulls and Bears EUR/USD

This indicator shows, that price is currently on a decline, but it doesn’t give us more details where the price could go. If you’ll see one line on the Bulls indiciator under the zero and next day it will be back above zero, be careful because it is often the indication of en ending correction.

News related to EUR/USD

As you can see there are some oncoming news, that can change a direction of price movement on EUR/USD. Be aware of higher volatility during these news. GDP and PCE index will be most important. Before news have a plan! I would also suggest not to use close stop-losses because of high volatility.

Wish you great profits!

written by Filip Lemon