EUR/USD: Tapering of volume & order flow hint falls ahead

Will the weekly print a fake candle? We are about to find out in 24h. On the daily, the price is re-testing again the 50% fibo retracement from its latest fall, which makes it attractive to start considering shorts. By dissecting the hourly, we can see how the connotations of the order flow and volumes are both indicating the rebound should be limited in nature.

Firstly, the velocity of the move down came much more impulsive vs the corrective upside move. Secondly, we are finally starting to see the tapering of volume into 1.1353 resistance ahead of the next critical area at 1.1395/1.14.

By analyzing the 3-day correlations on a 30-period, we can start tojustify as to why selling the Euro around near-by levels would be well justified based on the latest tick ups in the pair while both the German vs US and German vs Italian yield spreads head lower. The correlation for most of 2018 has been very strong, hence it’s acted as a great guide to assess the intrinsic value of the pair.