As you know, I’m not a big fan of trading the EUR/USD although I am quite bearish on the EUR crosses at present (EUR/GBP in particular). I’ve just been having a good hard look at the longer-term picture and I think a good case can be made for building a short position between 1.3550/1.3750 over coming sessions.

Obviously I need to make some assumptions which some of you will probably reject but that’s what makes a market!

  • The weekly chart is basically trading sideways albeit with a very mild bearish bias;
  • Prices are currently trading well above the major MAs indicating an over-bought state;
  • A 3-wave correction from 1.2050 has now been stalled twice roughly near the same level (1.3850);
  • If this is the end of the up-move then we should look to sell into rallies as a new medium-term downtrend emerges.

Well you gotta have a side!