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Faraday: Dovish Draghi has changed EURUSD dynamics

Thomas Light from Faraday Research is looking to sell EURUSD after ECB President Mario Draghi’s less than subtle hints at more economic stimulus have changed the market dynamics of EURUSD.

Looking at the weekly candle chart, Light says prices have finally broken a wedge pattern in place since May. This decisive break of market structure signals that EURUSD’s long-term downtrend is kicking in again, he adds.

Dropping down to the daily chart, Light says that Friday’s price action also broke below horizontal support.

Light’s strategy for this week is to wait for retracement back up into the broken support zone as this is likely to be used as new resistance. He is looking to place a sell order at 1.1092 with stops above Friday’s high at 1.1150. Light’s target for the trade is around the July lows at 1.0820.

01:11 minutes
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