EUR/USD showing signs of weakness

NEW YORK (Forex News Now) – The Euro has been racing against the US Dollar as of late, and as such had produced a fairly parabolic trend line through the month of September, and the beginning of October, as indicated by the red sloping trend line on the attached chart.

As the pair reached the 1.40 handle, the arrows on the chart point out the various “shooting stars” that had formed on the daily chart, a possible reversal formation.

The fact that this has happened a few times over the last 10 days is a sign that every time the bulls try to push the price above 1.40, the bears take control. There simply hasn’t been enough conviction to push the Euro higher.

It should also be noted that the trend line was broken, and prices fell. The Euro then found support at the bottom horizontal line that is drawn on the chart. EUR/USD analysis dictates at the moment that since the price raced back up to 1.40, and was rejected, we may be seeing consolidation.

Consolidation is common once a trend line breaks, and often before a trend change. While our EUR/USD analysis doesn’t necessarily call for a complete change of trend, it does appear that a pullback, maybe even to the 1.33 level is certainly possible.

Any break and daily close above 1.40 would signal another possible “leg up” in this pair. While our EUR/USD analysis doesn’t necessarily call for a complete change of trend, it does appear that a pullback, maybe even to the 1.33 level is certainly possible.

Any break and daily close above 1.40 would signal another possible “leg up” in this pair. Also, traders should be keeping an eye on the gold markets, as they have been a clear signal as to the direction of the US Dollar.