In the intricate realm of forex, EURUSD finds itself at a crossroads during the Asian trading session, grappling with the intricacies of its recent bullish momentum. However, a closer look reveals the emergence of challenges that cast shadows on the robustness of this upward trajectory.
The Asian trading session unfolds with EURUSD encountering resistance in its bid to sustain the bullish momentum. Notably, two substantial marubozu candlesticks loom large, casting a shadow over the recent bullish rally. These candlesticks, indicative of significant selling interest in EUR against the USD, serve as early warning signals, suggesting a potential weakening in the bullish trend.
As the day progresses, all eyes turn to the economic stage, with the US taking center spotlight. The Chicago PMI (Dec) data release, a crucial economic indicator, is poised to shape the market dynamics. Economists anticipate a slowdown, projecting a figure of 51 compared to the previous 55.8. A result surpassing expectations could embolden bears, exerting pressure on EURUSD bulls.
Venturing into the 1-hour timeframe provides deeper insights into the evolving scenario. A once-prominent bullish ascending red trendline has succumbed to downside pressure during the London trading session. Furthermore, the Exponential Moving Average (EMA) 50 is converging toward the EMA 200, signaling the emergence of bearish pressure. Despite these signs, it's crucial to note that the major trend remains bullish, as the EMA 50 has not formed a death-cross or crossed below the EMA 200, maintaining its position above the latter.
The Volume Profile indicator adds another layer to the analysis, with prices hovering beneath the value area. This positioning underscores the prevailing bearish sentiment, suggesting that the downward momentum is gaining traction.
Turning attention to the oscillator indicators amplifies the cautionary stance. The Moving Average Convergence Divergence (MACD) paints a bearish picture, with both the signal line and histogram residing below the 0 line. Simultaneously, the Relative Strength Index (RSI) has dipped below the 40% level, showcasing bearish momentum. The RSI's resilience in avoiding a breach above 60% underscores the prevailing strength of the bearish sentiment.
In summary, EURUSD finds itself in a short-term bearish phase, grappling with resistance and the impact of influential economic data. A pivotal signal to monitor is the potential formation of a death cross between EMA 50 and EMA 200, as the former converges toward the latter. As the market unfolds, traders are urged to remain vigilant, navigating the intricate currents of the forex landscape with a discerning eye.
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