A selloff is likely to be seen from 1.12 today...
The EUR/USD attracted fresh buyers into the market yesterday from a H4 demand logged in at 1.1131-1.1143, following the Fed’s decision to leave monetary policy unchanged. This, as you can see from the H4 chart, saw prices eventually cross swords with a trendline resistance taken from the low 1.1045. United with a nearby psychological hurdle seen at 1.12, the team feels bids will likely weaken from this vicinity today.
Although the 1.12 handle deserves attention, we would still exercise caution here! On the daily chart, the candles are currently lurking within a support area seen at 1.1224-1.1072. However, as we’ve mentioned in previous writings, there’s been little noteworthy bullish intent registered from this barrier. Perhaps the most compelling factor here is that the candlesticks are in the process of completing an AB=CD bull pattern (black arrows) which terminates around the lower edge of the above said support area, and also converges with a trendline support extended from the low 1.0516. In addition to this, weekly action remains trading around the underside of a major resistance area at 1.1533-1.1278, thus increasing the chances of a selloff being seen.
Our suggestions: All in all, our team is looking for prices to weaken from the 1.12 neighborhood today. For us personally though, a short trade will not be permitted until a H4 bearish candle is seen. Targets for this trade fall in at the above said H4 demand, followed by the H4 support at 1.1075 and the 1.11 band (green zone). Not only is 1.1075/1.11 a good take-profit area for any shorts in this market, it’s also a fantastic barrier to look for longs. It sits within the depths of the aforementioned daily support area, as well as merging with both the above noted daily trendline support and a deep H4 88.6% Fib support at 1.1081. Although the H4 buy zone will very likely bounce price, do keep in mind that by entering long from here you’re effectively buying into weekly flow.
Although the 1.12 handle deserves attention, we would still exercise caution here! On the daily chart, the candles are currently lurking within a support area seen at 1.1224-1.1072. However, as we’ve mentioned in previous writings, there’s been little noteworthy bullish intent registered from this barrier. Perhaps the most compelling factor here is that the candlesticks are in the process of completing an AB=CD bull pattern (black arrows) which terminates around the lower edge of the above said support area, and also converges with a trendline support extended from the low 1.0516. In addition to this, weekly action remains trading around the underside of a major resistance area at 1.1533-1.1278, thus increasing the chances of a selloff being seen.
Our suggestions: All in all, our team is looking for prices to weaken from the 1.12 neighborhood today. For us personally though, a short trade will not be permitted until a H4 bearish candle is seen. Targets for this trade fall in at the above said H4 demand, followed by the H4 support at 1.1075 and the 1.11 band (green zone). Not only is 1.1075/1.11 a good take-profit area for any shorts in this market, it’s also a fantastic barrier to look for longs. It sits within the depths of the aforementioned daily support area, as well as merging with both the above noted daily trendline support and a deep H4 88.6% Fib support at 1.1081. Although the H4 buy zone will very likely bounce price, do keep in mind that by entering long from here you’re effectively buying into weekly flow.
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