Monday, November 07, 2016

The EUR/USD Correction Could Continue to 1.0966

The RSI divergence we could observe on the four-hour time frame was a signal that after the market opened this week there would be a move to the downside and that was exactly what happened.

The pair opened with a 80 pips bearish gap which was only partially recovered before the pair started moving slowly to the downside.

Every divergence has a certain strength and based on that we can figure out the target of the move that follows it. The divergence (in red) on the 4-hour time frame has a target around 1.0966.

We should not forget, however, that this week there will be important economic news coming out, and tomorrow is the day when the American voters will elect the next US president and the results of these elections could cause strong and unexpected moves in either direction.