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EURUSD – Time has come for a dearly needed correction

Following a prolonged bull run the EURUSD pair finally meets with a lead cover as it receded after hitting the yearly and quarterly moving averages (circled on the corresponding price charts here below):

EURUSD Yearly Price Chart

EURUSD Quarterly Price Chart

It has also formed a weekly dark cloud cover after encountering the upper volatility envelop boundary (circle on the weekly price chart on the right side here below):

EURUSD Weekly Price Chart

and it has been sold heavily sold last week as identified on the daily time frame by a series of shooting star candles (identified by the top red arrows) as well as two successive bearish engulfing patterns (with body of the red candles swallowing the body of the green candles):

EURUSD Daily Price Chart

The EURUSD pair is very heavy for now and has certainly entered into a correction phase and I expect the price to move lower into the 1.15 area in the coming weeks. It can now be sold with a stop loss above 1.198.

Disclosure: I am now short EURUSD.

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