Euro vs dollar on the MT4 daily chart

EUR/USD – Daily MT4 Chart and Hawkeye Fatman

The euro vs dollar on the daily chart looks set to end the week just below the psychological 1.3000 level, following this week’s pause in the bullish trend for the pair. Indeed the short term pullback came as no surprise, as Hawkeye delivered an isolated pivot high on the daily chart at the 1.3172 level, before moving lower throughout the week, which was largely expected, following the surge higher on QE3. The volume this week on the daily chart has also reflected this negative sentiment for the euro dollar pair, with no demand volume first appearing on Tuesday and Wednesday, followed by rising selling volume on Thursday.

Despite this, the Hawkeye trend on the MT4 daily chart remains green, along with the Hawkeye Heatmap which remains firmly bullish, so the question now, is whether this is a short term pause in the recent upwards trend, or is the first sign of a reversal. To answer this question we need to consider the Hawkeye Fatman indicator, both for the daily and weekly time frames.

Here we can see that on the daily chart, the green line, the euro, is moving from an overbought region, and is now moving lower, reflecting the current short term weakness in the euro. As such, we can expect to see further selling in the euro next week, with the euro dollar possibly testing support in the 1.2800 region in due course. However, on the weekly Fatman indicator, the picture is very different, with the euro rising strongly from an oversold region, and moving sharply higher.

This is a clear signal that bullish sentiment for the euro is far from over, and therefore the current short term selling, is simply a minor correction in the longer term bullish trend. We can therefore expect to see a resumption of this bullish sentiment in due course, with the 1.3500 region, the next level of deep resistance that now awaits.

If you would like to see Hawkeye in action, please just click the following link to join me in one of my Free live trading rooms – I look forward to seeing you there – Anna