So we are back in the downtrend on the EUR/USD. Last week was not eventful until Friday when we found out the Nonfarm Payrolls. They came worse than expected, which triggered a bullish reaction. That was very emotional and was quickly denied once traders looked at the data in a greater detail and explained that disappointment with the heavy snowfalls. Demand for the USD came back quickly and the price made new mid-term lows.
How does the situation look in the long-term? Technically bearish. We are still suffering after the false breakout (blue) above the neckline (red) of the inverse head and shoulders formation (yellow). Most days after that were bearish. Currently we found a local support, which is created by the lower line of the wedge formation (trend continuation pattern). This is the place where we possibly can get a bullish bounce but the long-term sentiment is still negative. So far, Monday's candle looks like hammer, which supports the short-term positive sentiment.
Once the lows from today are broken, buy opportunity will be denied and mid-term sell signal will be triggered. Calendar this week is empty so trading should be more technical and hopefully our view on this instrument will not be negatively affected by the news or the data.
