By FXEmpire.com
EUR/USD fell hard on Wednesday as the downtrend line that we have been watching has held yet again. In fact, the overall shape of the market looks as if it is turning into a descending triangle, and this adds to the overall bearish sentiment on the charts.
The European Union continues to have several different issues going on at once, most of which are not good. The yields in various countries around the region continue to rise over time, and as such there is going to be many traders concerned about the region’s economic outlook. The austerity issues that have come about recently have put a spotlight on many of the region’s elections, most notably France.
The French and Greeks are both about to have elections over the next couple of days, and this could have an effect on the austerity measures that he region had agreed to. Many of the candidates are suggesting that the deal should be renegotiated. This could add a lot of uncertainty to the region as well, putting pressure on the Euro overall.
The candle for the Wednesday session suggests that we could see a continuation of weakness in the pair. The stock markets in Europe traded horribly during the session, and as a result there is a good possibility that the Euro will suffer in the coming days as well. Above the descending trend line that we have identified is the 200 day exponential moving average, and as a result this pair will be considered in a downtrend by the longer term trend traders as well.
The next couple of sessions could be a bit choppy as Friday brings the Non-Farm Payroll numbers out of America, and the weekend brings in the French elections. A Socialist victory could be negative for the markets, and looks very likely. This leads us to want to continue selling this pair going forward on rallies that prove to stall, and a break of the bottom of this long, red candle representing the weak Wednesday session as the pair simply cannot keep the bullish momentum.
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Originally posted here
