1.18/1.1815 looks like a reasonable base for longs...
Despite a strong bounce materializing from the 1.19 handle in opening trade on Monday, the single currency remained under pressure from the results of the German elections. After H4 price conquered the 1.19 support in early London the unit aggressively tumbled lower, consequently ending the day bottoming just ahead of August’s opening level at 1.1830. Also noteworthy here is the H4 AB=CD symmetry denoted by the black arrows, the nearby daily demand zone pegged at 1.1739-1.1823 and current weekly support marked at 1.1871.
Suggestions: On the whole, we do believe the EUR is likely headed higher. Not only because of the clear technical support in place, but also due to the strong uptrend the major has been in since the beginning of the year. However, before this we may see the pair surpass August’s opening level to test the top edge of the noted daily demand base (between the H4 AB=CD 127.2% mark at 1.1815 and the 1.18 handle looks a nice reversal point [green zone]).
Should price challenge the green H4 buy zone today and chalk up a reasonably sized H4 bull candle, preferably in the shape of a full, or near-full-bodied candle, the odds of price rallying back up to 1.1850/1.19 are high, in our view.
Data points to consider: US CB Consumer confidence along with New home sales at 3pm; FOMC member Brainard speaks at 3.30pm, follow by Fed Chair Yellen at 5.45pm GMT+1.
Suggestions: On the whole, we do believe the EUR is likely headed higher. Not only because of the clear technical support in place, but also due to the strong uptrend the major has been in since the beginning of the year. However, before this we may see the pair surpass August’s opening level to test the top edge of the noted daily demand base (between the H4 AB=CD 127.2% mark at 1.1815 and the 1.18 handle looks a nice reversal point [green zone]).
Should price challenge the green H4 buy zone today and chalk up a reasonably sized H4 bull candle, preferably in the shape of a full, or near-full-bodied candle, the odds of price rallying back up to 1.1850/1.19 are high, in our view.
Data points to consider: US CB Consumer confidence along with New home sales at 3pm; FOMC member Brainard speaks at 3.30pm, follow by Fed Chair Yellen at 5.45pm GMT+1.
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