The pick of the day is EUR/USD as Mr. Euro has been dancing on a very volatile manner against Ms. USA since this morning following the European Central Bank decision to keep rates on hold. On the 6 hour dance floor the pair has been dancing on a downward channel since December failing to reach the lower band, especially with this morning’s moves which had the pair suddenly touch 1.35758, catching many day traders off-guard.
If we throw in an Ichimoku indicator, we’ll notice that the pair is dancing below the Ichimoku cloud, trying to reach the flattening Kijun line.
On the daily dance floor the pair is still struggling to confirm a break below the 61% Fibonacci level at 1.35212, and today’s moves suggest that this level may have been just the strong resistance level we’ve been looking for to enter a bullish position.
Taking a look at the market sentiment to complete the basics of our Invest Diva Diamond Analysis, the Speculative Sentiment Index shows that 64% of retail traders are in a short position for EUR/USD. We use this type of indicators as a contrarian to price action, and the fact that the majority of traders are short gives signal that the pair may continue higher.
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