This morning Alan Collins from 3cAnalysis.com takes a look at EURUSD, and explains why he is going short into this week and looking to sell any short term rallies.

Collins has 3 main reasons:

1. Last week's decline through 1.1000 was the 3rd down week in a row and the 4th from the last 5 weeks.
2. Although the market stalled close to a 62% correction to the Dec – May rise, like in June, the mid-point of an increasingly negative Keltner channel has been capped rallies.
3. The key 13 day mvg average has also been capping rallies ever since the post Brexit vote drove EURUSD to June’s 4 month low.

The decline is gradual rather than explosive and Alan Collins is expecting that scenario to continue.

Profit taking rallies are likely to find sellers near the 13 day moving average, currently 1.1049.

On the downside we target June’s 1.0910 low, then 1.0825 which is February’s bottom or even 1.0782 a broader 76% correction point.

Only above 1.1168 proves this view is not right and sentiment has turned positive.