Today on EURUSD – Daily and H4 charts support Short trades, but…

On the Daily chart above, since early December, last year, the bears have been in control of the EURUSD and current price action is showing they are probably resolved to keep situation that way. After the sharp break below the upward or bullish channel, and a subsequent shallow bullish retracement that got stopped about 20 pips below a strong resistance level – the most recent Weekly swing low @ 1.4216 (which we’ve highlighted on the Daily chart using the upper blue broken line), price seems set to continue its southward journey: Yesterday’s candle closed as strong bearish candle and early market activity today has seen price break below the previous day’s low @ 1.4041 (not highlighted) and, more importantly, the most recent Daily swing low @ 1.4028 (which we’ve highlighted using the lower blue broken line). Consequently, we expect price to continue collapsing. Based on the above analysis, as expected, our bias is currently bearish, although very conservative traders might prefer to wait for today’s candle to close decisively below the 1.4028 level before placing their Short trades.

On the H4 chart above, price has broken the most recent swing low – also the previous day’s low @ 1.4041 (which we’ve highlighted using the upper blue broken line) downward. That automatically sustains our bias in favor of a downward price move. We would also observe on the H4 chart the important support level – the most recent Daily swing low @ 1.4028 (that we’ve highlighted using the lower blue broken line), which was discussed on the Daily chart. Currently, price has breached both the 1.4041 and 1.4028 levels. While there might be a tussle between the bulls and bears around these levels for a while, we expect price to eventually continue its southward move.
The white horizontal line @ 1.4193 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact.

However, we still need our Hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our Short positions. Price pattern on the Hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.