FX.co ★ Technical analysis of EUR/USD for October 31, 2016

Overview:

• On the 4H chart, the EUR/USD pair continues moving in a bearish trend from the resistance levels of 1.1087 and 1.1031. Currently, the price is in a bearish channel. This is confirmed by the RSI indicator signaling that we are still in a bearish trending market. As the price is still below the moving average (100), immediate resistance is seen at 1.1000, which coincides with a golden ratio (38.2% of Fibonacci). Consequently, the first resistance is set at the level of 1.1031. So, the market is likely to show signs of a bearish trend around the spot of 1.1031/1.1000. In other words, sell orders are recommended below the spot of 1.1031/1.1000 with the first target at the level of 1.0906. Furthermore, if the trend is able to breakout through the first support level of 1.0906. We should see the pair falling towards the double bottom (1.0850) to test it. On the other hand, it would also be wise to consider where to place a stop loss; this should be set above the second resistance of 1.1087.