There's really not much to tell for EURUSD's short term price movements. It fluctuates up and down, but eventually just about always comes to another crashing fall. Speaking of the short term, the trade should be pretty clear - sell. In fact, I found there's really no need to be doing any intra-day analysis on this pair because this pair either experiences periods of very low volatility or consistent selling. Probability wise, it will continue to fall so better luck selling than trying to buy a reversal. With that being said, it is time to look at the long term outlook to see where this pair is headed. For this purpose, I took a chart shot of the monthly time frame.
Very simple setup actually. Fibonacci drawn from October, 2000 to about April, 2008 as these two points represent a relative high and low point. Taking a look at the more recent price action, a support zone is drawn as the approximate 1.21344 price level marked the turn points of this pair. Notice that from 2006 onwards, price failed to break lower than this support zone after attempting it twice. Finally, two converging trend lines shows the price consolidation over the past couple of months. As you can see, EURUSD rebounds from the upper descending trend line and breaks below the ascending trend line. The sharp monthly fall is a good sign that the breakout has succeeded. Generally, we don't want to validate a signal when the price just slowly inches across the trend line. In this case, the sharp crossover is a good sign of a break out.
Taking a look at the price and moving average setups, this also strengthens our bearish outlook for this pair. The price just crossed below the 120 simple moving average (solid line) and 65 simple moving average (dashed line). Furthermore, the 65 period SMA is coming together with the 120 period SMA for a possible crossover. Because of the SMA settings, the two moving averages will be lagging very far behind. Because of this, you should not be placing your trade based on the crossover.
This analysis mainly seeks to identify a possible price target. In this case, it looks like the 1.21344 price zone looks like a good place. The support zone fits very well with the 50.0 Fibonacci retracement level so we see two different charting methods both indicating price will rest somewhere along here. Once price reaches this level, traders should begin covering their shorts. I wouldn't full close out the position, but it is a good idea to start scaling out in case the price does reverse.
