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Collins: Potential downside for EURUSD

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November 14, 2014 equities, eur, eur usd, eurgbp, eurjpy, euro, euro area, euro crisis, euro dollar, euro growth, euro rates, euro strength, euro zone, eurocrisis, eurodebt, eurodollar, europa, europe, europe growth, european, european banks, european central bank, european economy, european recovery, european union, eurozona, eurozone, eurozone crisis, eurozone economy, eurozone inflation, eurozone recovery, eurusd, fx, fx award, fx changes, fx crosses, fx dealing, fx dollar swiss, fx exchange, fx forex, fx gbpusd, fx interbank markets, fx investing, fx market, fx markets, fx options, fx pound, fx saxo bank, fx spot, fx strategy, fx trade, fx trade idea, fx traders, fx trades, fx trading, fx tradinging, fx trends, fx volatility, fxallocationmodel, fxfx, fxmarkets, fxmonthly, fxoptions, fxspot, fxtrade, usd, usd eur, usd index, usd jpy, usdchf, usdeur, usdgbp, usdjpy, usdusd
Alan Collins from 3cAnalysis is looking at the downside potential for EURUSD. Alan explains that last week prices reached the most negative levels traded for 27 months. Although a third down week in succession was posted, the lows were not held and more than half of the initial downside was regained into the close.
Therefore, Alan thinks there is scope for further profit taking this week, but trading instead has been volatile and has changed direction each day. This means that signals for sentiment aren't strong but the 13-day moving average continues to cap the topside which has led to some selling in Asia.
Europe often sees an early reaction to Asian selling. Alan expects a bounce to the 1.2455-60 area and he looks for this week's lows to be retested at 1.2358. In the coming days 1.2289 is in focus and the risk for this trade is a move above yesterday's 1.2493 top.

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