One of the currency pair in trading forex, euro usd, is in a mjor downtrend since November and is now reaching a major resistance level at 1.38. If you have short sold euro to usd, prepare to cover, as a retracement is expected the following month after a quick drop in the euro exchange rate. The major forex pair has been in a downtrend from 1.51 during the last 2 months and your usd accounts are now worth 15% more! However, I won't be converting my dollars to euros just yet, since in the long term I predict a decline of the euro rate even below 1.30.

If forex trading is in your interests, you must have witnessed the latest eur/usd downtrend and possibly made some profit. After all there were signals of the decline, like breaking the support level at 1.47 which actually verified the trend. The trend of the euro usd began a few weeks before that though, when a double top appeared on the euro chart in late November, followed by the worst day of the last months losing 200 pips in a day. I would have expected a bounce at the next resistance level at 1.45 but that never happened for the euro exchange rate. It finally found resistance in its downtrend at 1.42. However, drawing a Fibonacci Retracement clearly shows that the downfall is a strong one since the eur/usd retraced to 38%. After that the euro usd pair broke below the resistance level at 1.42 and is still trending.

When I'm trading forex, euro usd is the pair with the most short-term interest. Now though trading the euro rate looks rewarding even for the long term forex trader and I predict it will continue to do so in the following months. Just follow the trend, which is your friend!