EURUSD: Technicals Line Up to Hint Bearish Reversal

[B]My picks:[/B] Short EURUSD (pending)
[B]Expertise:[/B] Global Macro, Classic Technical Analysis
[B]Average Time Frame of Trades:[/B] 1 week - 6 months

EURUSD is showing signs of stalling momentum ahead of 1.4181, the 50% Fibonacci retracement of the07/18/08 - 10/31/08 decline from the record high above 1.60. This level marked the swing top for EURUSD in January and preceded a drop of nearly 2300 pips. A shooting star candlestick formation is in place, with a bearish close on the currenct candle set to act as confirmation. Negative divergence on the RSI oscillator further bolsters the likelihood of a bearish scenario. Fundamentals are supportive: GDP growth in the currency bloc is expected to substantially under-perform that of the US into the first quarter of next year, suggesting the ECB is likely to lag behind the Fed in raising interest rates as the recovery materializes.