By Dan Eduard – For over a week, the euro has been making consistent gains on its Danish counterpart. As we will see through a variety of technical indicators, the pair is set to enter into a bearish trend.
This analysis will be based on the daily chart for EUR/DKK, provided by ForexYard. The technical indicators we will use to support our theory are the Bollinger Bands, Stochastic Slow and Relative Strength Index.
1. The pair is currently trading right along the upper Bollinger Band. This is usually an indication of imminent downward movement. Furthermore, a widening of the Bollinger Bands, as seen in the chart, may be a sign of impending volatility.
2. The Stochastic Slow lines have formed a cross right on the upper resistance line. Traders can take this as a signal that a correction is likely to take place in the near future.
3. Lastly, the RSI is currently seen above the upper resistance line, indicating that a downward correction will take place. This further supports our original theory that the pair is likely to enter a downward trend.
Forex Market Analysis provided by Forex Yard.
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