EUR/USD – End Of The Correction ?

On 16th January we triggered a blog alarm about the oversold status of the EURUSD. We asked ourselves if a correction on the Euro was looming (check our post made that day, price was at 1.2650). Well today, following the reversal from 1.3485 – double top in place – we are wondering if the correction from 1.2620 is now over.

There are a couple of warnings that supports this view – (1) daily potential divergence, (2) bearish weekly ribbon. The long-term chart is still bearish and what happened in February was a correction, simply a correction. Of course, many other triggers have not been activated yet but they were not activated either back on 16th January. These triggers are:

(a) Break below 1.3230
(b) A reversal of our BearBull index, and a color reversal on the bar chart (daily snapshot)
(c) Daily indicators are still supporting price rally
(d) Break of Dow Pivot level, 1.2970.

Even our 4-hourly radar remains positive – check below the enclosed chart. Still, on 16th January there was a couple of divergence talking place on the daily chart which warned us about a potential correction. The same type of divergences are talking place again on the daily chart – more about these daily divergences shortly – but this time on the upside. There will be other tests around 1.3450/00 in the coming days and price will tell us more about this resistance area set around 1.35.

So yes, we are asking the following question after yesterday’s price drop and the small double top in place – check bar chart below. Is this the end of correction ? Why not …

Have a successful trading day.
Best regards