Free Forex Signals – Watching Potential Double Bottom
EURUSD Daily Analysis: EURUSD has rallied over 360 pips from it's August lows (around 1.0850) after the Chinese decision to allow the 'free market' to depreciate the yuan (which, non-coincidentally, will benefit their domestic exports). That rally forms the right bottom of a double bottom pattern we are closely watching, with the left bottom being the July lows around 1.0805, and the neckline at 1.1210.
This makes 1.1210 a key technical resistance level to watch - a break above this level confirms the double bottom pattern and makes a potential rally toward 1.14 likely. If we stay below 1.12 we are likely to see more consolidation as the markets weigh the likelihood of a September Fed rate increase in light of the yuan devaluation. Given past Fed statements our money is on the Fed raising rates despite the risks due to a) their view that the US economy is healthy, b) fear of future inflation and bubbled assets, and c) because after a historic run of zero interest rate policy (ZIRP) the Fed feels pressure to stick to their words in point A.
Our Preferred Trades*: In the short-term we are flat due to lack of a convincing trend in either direction, but aggressive traders could look to find support at 1.1030 (50% retracement of August rally) and resistance at 1.1200 for some ranging day trades.
Yesterday's EURUSD SwingPRO Signal Result: No trades triggered yesterday.
Today's SwingPRO Signal: Flat. See preferred trades section above.
*CandlePRO: CandlePRO can be used in conjunction with our daily analysis and "our preferred trades." For example, if we prefer "going short" or "selling a rally" then we would look for bearish candlestick signals after a rally or near resistance levels. Alternative if we prefer "going long" or "buying a dip" then we would look for bullish candlestick signals on price drops or near support levels.
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