I drew a bullish channel on the daily chart at the beginning of last week, but the price broke out of both sides of it, and now with this latest bearish move, the channel is well and truly useless.
Below is a daily chart of EURUSD with 100 and 200 period simple moving averages:
The price rose Thursday, hit the 100 SMA, and fell. Most of the other time-frames also show price action underneath the 100 SMA which means in theory there's nowhere for it to go but down.
But, beware. Traders looking to buy EURUSD will use this opportunity to do so. We have the 1.3000 level to penetrate first before we can be sure of continuing bearish moves.
Looking at the daily EURUSD chart with Ichimoku Kinko Hyo plotted we can see price is just resting on the cloud - it would need to penetrate this as well if it is to continue falling:
So, technically everything is pointing towards bearish price movement. Even this pretty lady with the excellent charts agrees.
If there's a big fight between the bulls and the bears, then EURUSD will consolidate and whipsaw around like a wild caged animal for a while. That won't be fun.
As always, I'll look for consolidation patterns. Here is a 5 minute EURUSD chart with 100 period Bollinger Bands plotted. It's already formed a nice consolidation pattern, which I have missed to the down-side. I will consider setting a BUY-STOP to the top-side, though.
