EUR/USD approaches 1.42

In my earlier article, i mentioned that it is worth noting that the EUR/USD has been
bearish for the past few days.

As hard as it tried, 1.4400 is simply out of reach for now.

Moments ago, it broke through the support region of 1.4280.

It is currently approaching the major support at 1.4200.

To clear this huddle, major bearish momentum will be needed.

If it breaks down, the next major support may be the daily lower trendline.

As always, let’s take a look at the other spectrum of the financial markets for clues.

S&P500 on a daily timeframe above looks due for a retracement.

It has been closing near opening for the past few days. Suggesting hesitation and risk aversion.

If a bearish momentum does develop, a retracement of the financial markets maybe in the pipeline.

Brent Oil on the daily shows a similar fate to the EUR/USD.

A breakthrough of the $75 region is tough for now.

It is currently diving towards support at $70 and i will be watching closely to see if it breaks down.

Last but not least, my personal risk aversion indicator, the 10 years US treasury bond yield.

Since August 10, it has been doing a sky dive towards the bottom and is currently testing support.

If cleared, it may suggest that risk aversion is indeed increasing and more demand for safe assets is on.

Hence a strengthening USD may develop.

It is interesting to note that a few positive news over the past few days did little to push the pair up.

This also tells me that the market may be expecting even better results and thus has mixed feelings about the releases.

An excellent release may change the tides and hence one should diligently do his or her homework.

Trade safe.

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