EUR/USD Test of Support

Daily: The EUR/USD is about to test the 1.4200 support. The daily chart’s price action shows very aggressive bearish candles after reaching 1.4600.

In fact, with the stochastic showing heavy momentum, and not even over sold conditions, the market is hinting this may continue to the 1.40 area in the short-intermediate term.

4H: The decline was anticipated, and there was a throwback, but it did not reach the previous support at the 1.4460 area. Instead the correction rally made it to 1.4410 only before a strong bearish candle right ahead of the US session.

The 4H time-frame shows a possible short-term swing projection to the 1.4180 area(127.0% retracement). This would be considered a break of the 1.42 support for the recent consolidation, but some confirmation would be nice. This would also complete a bullish butterfly, so there’s some bullish forces at this level.

See if the market can suppress a rally coming out of this possible bullish butterfly formation. Laborious attempts and topping action below the 1.4400 pivot indicates the market may continue further down. The then-short term projection for this decline would be to the 1.4000 area. An intermediate projection is to the 1.37 area (61.8% retracement area in daily).

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All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.