What we're looking at on the EUR today/this week...
Weekly gain/loss: + 68 pips
Weekly closing price: 1.0730
The EUR/USD enjoyed another relatively successful week, increasing its value by a further 70 pips and printing its third consecutive weekly bullish candle into the close. Despite this, there could be trouble ahead. Plotted in our field of vision right now is a nearby weekly resistance level pegged at 1.0819, shadowed closely by the 2016 yearly opening base line drawn from 1.0873. What’s also notable from a technical perspective is the potential weekly AB=CD bearish pattern (see black arrows) that terminates above the aforementioned weekly resistances at 1.0980.
Turning our attention to the daily candles, nevertheless, we can see that price came into contact with a bearish daily AB=CD (black arrows) 127.2% Fib ext. at 1.0770 on Friday. Leaving the daily trend resistance extended from the high 1.0873 unchallenged, price sold off and erased the majority of Thursday’s gains. As you can probably see though, there’s not much room left for the bears to stretch their legs here owing to the daily support area positioned just below at 1.0714-1.0683.
A quick recap of Friday’s sessions on the H4 chart shows that price hit the brakes and reversed from the H4 supply zone marked at 1.0797-1.0780. The US prelim UoM consumer sentiment survey, a notable market-moving event, was largely ignored. This, as far as we can see, helped the major close the week forming two back-to-back H4 selling wicks just ahead of a H4 demand area at 1.0705-1.0723. Also of particular interest here is the H4 demand is actually located around the top edge of the aforementioned daily support area, which also sits a few pips above the 1.07 handle and happens to merge nicely with a H4 trendline support taken form the high 1.0679.
Our suggestions: Based on the above points, our prime focus today will be on the current H4 demand area. Due to its surrounding confluence, additional support coming in from the daily picture and room seen to advance north on the weekly chart, there’s a healthy chance of a bounce being seen from the H4 base.
Whether or not this zone requires additional price confirmation before entry is obviously down to the individual trader. For us personally, we have decided to wait for a reasonably sized H4 bullish rotation candle to take shape before a long trade is executed for the simple reason that we do not favor getting stopped out on a fakeout down to 1.07!
Data points to consider: German Buba President Weidmann speaks at 4.45pm. FOMC member Evans speaks at 5.10pm and President Trump takes the stage at 11.30pm GMT.
Levels to watch/live orders:
• Buys: 1.0705-1.0723 (waiting for a reasonably sized H4 bull candle to form is advised before pulling the trigger, stop loss: ideally beyond the confirming candle).
• Sells: Flat (stop loss: N/A).
Weekly closing price: 1.0730
The EUR/USD enjoyed another relatively successful week, increasing its value by a further 70 pips and printing its third consecutive weekly bullish candle into the close. Despite this, there could be trouble ahead. Plotted in our field of vision right now is a nearby weekly resistance level pegged at 1.0819, shadowed closely by the 2016 yearly opening base line drawn from 1.0873. What’s also notable from a technical perspective is the potential weekly AB=CD bearish pattern (see black arrows) that terminates above the aforementioned weekly resistances at 1.0980.
Turning our attention to the daily candles, nevertheless, we can see that price came into contact with a bearish daily AB=CD (black arrows) 127.2% Fib ext. at 1.0770 on Friday. Leaving the daily trend resistance extended from the high 1.0873 unchallenged, price sold off and erased the majority of Thursday’s gains. As you can probably see though, there’s not much room left for the bears to stretch their legs here owing to the daily support area positioned just below at 1.0714-1.0683.
A quick recap of Friday’s sessions on the H4 chart shows that price hit the brakes and reversed from the H4 supply zone marked at 1.0797-1.0780. The US prelim UoM consumer sentiment survey, a notable market-moving event, was largely ignored. This, as far as we can see, helped the major close the week forming two back-to-back H4 selling wicks just ahead of a H4 demand area at 1.0705-1.0723. Also of particular interest here is the H4 demand is actually located around the top edge of the aforementioned daily support area, which also sits a few pips above the 1.07 handle and happens to merge nicely with a H4 trendline support taken form the high 1.0679.
Our suggestions: Based on the above points, our prime focus today will be on the current H4 demand area. Due to its surrounding confluence, additional support coming in from the daily picture and room seen to advance north on the weekly chart, there’s a healthy chance of a bounce being seen from the H4 base.
Whether or not this zone requires additional price confirmation before entry is obviously down to the individual trader. For us personally, we have decided to wait for a reasonably sized H4 bullish rotation candle to take shape before a long trade is executed for the simple reason that we do not favor getting stopped out on a fakeout down to 1.07!
Data points to consider: German Buba President Weidmann speaks at 4.45pm. FOMC member Evans speaks at 5.10pm and President Trump takes the stage at 11.30pm GMT.
Levels to watch/live orders:
• Buys: 1.0705-1.0723 (waiting for a reasonably sized H4 bull candle to form is advised before pulling the trigger, stop loss: ideally beyond the confirming candle).
• Sells: Flat (stop loss: N/A).
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