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Collins: A negative outlook for EURUSD

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With the underlying tone in EURUSD remaining negative, Alan Collins from 3c Analysis is looking to sell the currency pair. A sharp decline in EURUSD last Friday created a temporary buying opportunity, but Alan notes these rallies have been relatively weak. Levels failed to move above last Friday’s Marabuzo line or the key 13 day moving average, indicating a lack of confidence in the temporary rally.

 

A number of economic reports from the US are due out this week, despite the Thanksgiving holiday on Thursday. October new homes sales data and final consumer sentiment numbers for November are scheduled for release. A preliminary consumer sentiment report surprised investors with an unexpected drop to the lowest level in 13 months. Additionally, the Commerce Department revised US Q3 GDP to 3.9 percent from 3.5 percent on Tuesday. Trading this week is expected to remain light due to these conflicting economic reports and the upcoming holiday.  

 

Alan expects the euro to remain weak against the dollar and his downside targets for this trade are: EUR 1.2401, EUR 1.2358, and EUR 1.2289. Only a move above EUR 1.2570 would negate this trading scenario.

 

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