Europe Open: Bearish Breakouts in action

EUR/USD H1

Yesterday’s low and Today’s L3 acting as intraday support against onslaught of bears. After we’ve seen the largest drop in EUR/USD in 2.5 months, a small rebound will not be surprising. H3 may act as significant resistance for bulls today while a break below L3 will accelerate bearish momentum.

GBP/USD H1

H3 of Cable will also act as significant resistance similar to Fiber. Break below Yesterday’s Low + L3 may indicate a continuation of downtrend, but overall GBP/USD appears to be better supported compared to EUR/USD. If H3 is broken upwards, price could trade within 20 pip range between H3 and H4, which is the consolidation channel we seen back on 8th Oct.

DAX Futures H1

DAX showing a classic retracement price action that failed to push price back above the breakout. With Today’s prices looking to carve out a new weekly low, bulls will have a tough time pushing prices back up to H3/H4 levels.

FTSE 100 Futures H1

Same failed retracement pattern observed in FTSE, though the setup is slightly different, the implications are the same as DAX.

Brent Crude Oil H1

Strong uptrend observed in Crude oil despite the overall bearishness in the market. If we break above Yesterday’s high, $117.5 (top of previous trading range) comes back into focus.

Bottomline:

Bearish breakout occurring in European equity indices. Currencies are still supported but could also break again especially if risk-sentiment continues to be pessimistic. Oil is the only odd one out which has created a new weekly high but that could be easily explained by Middle Eastern conflicts.

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