Euro / US-DollarShort
The 1.13 handle may offer strong resistance
EUR/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
April spent the best part of the month feasting on the top edge of demand from 1.0488/1.0912, squeezing out a Japanese hammer candlestick pattern, typically viewed as a bullish reversal signal.
May, as you can see, recovered off worst levels and wrapped up a few pips shy of monthly highs, with June extending gains and recently reconnecting with the lower ledge of supply at 1.1857/1.1352 (unites with long-term trendline resistance [1.6038]).
With reference to the primary trend, price has exhibited clear lower peaks and troughs since 2008.
Daily timeframe:
Partially altered from previous analysis -
Wednesday had EUR/USD address a potential reversal zone (PRZ), derived from a harmonic bearish bat pattern (comprised of an 88.6% Fib ret level at 1.1395, a 161.8% BC projection at 1.1410 and a 161.8% Fib ext. level at 1.1462 [red oval]), and rotate lower into the week’s end, down by 0.30%.
It’s common to see traders sell PRZs and place protective stop-loss orders above the X point, in this case at 1.1495. Common targets, which may hit this week, fall in at the 38.2% and 61.8% Fib ret levels (derived from legs A-D) at 1.1106 and 1.0926, respectively.
In addition to the bearish configuration, the RSI indicator recently exited overbought territory.
H4 timeframe:
Despite an active attempt to topple supply coming in from 1.1415/1.1376 late Wednesday, an area boasting a connection to the lower edge of the daily harmonic PRZ, the candles dipped through 1.1241 (June 9 low), running local sell-stop liquidity and testing support at 1.1226.
The question going forward is 1.1226 enough to tempt buying? Or are we heading to demand at 1.1189/1.1158 (prior supply), drawn close by neighbouring demand at 1.1115/1.1139?
H1 timeframe:
Early Friday rebounded off channel support (1.1194) and reclaimed 1.13 to the upside. Things turned sour heading into London, however, forming a shooting star Japanese candlestick pattern (considered a bearish signal) from the 100-period simple moving average. US trade welcomed an animated push back through 1.13, surpassing 1.1250 to complete an intraday ABCD pattern (where legs AB equal CD) at 1.1211 that prompted a recovery play marginally above 1.1250 by the day’s end.
RSI traders will also note the value edged into oversold territory as we finalised the ABCD pattern.
Structures of Interest:
Long term:
Monthly supply at 1.1857/1.1352 in play, as well as the daily harmonic bat pattern’s PRZ capping upside mid-week, points to a move lower going forward, at least until the 38.2% daily Fib ret level at 1.1106 enters the setting.
Short term:
Contrary to the higher timeframes, analysis based on the H4 and H1 introduce the possibility of an intraday recovery to 1.13, converging with H1 channel resistance (prior support – 1.1194).
On account of the above, a short-lived move to the upside could materialise today, test 1.13 on the H1 and turn lower to align with higher-timeframe direction, creating a reasonably appealing bearish scenario.
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
April spent the best part of the month feasting on the top edge of demand from 1.0488/1.0912, squeezing out a Japanese hammer candlestick pattern, typically viewed as a bullish reversal signal.
May, as you can see, recovered off worst levels and wrapped up a few pips shy of monthly highs, with June extending gains and recently reconnecting with the lower ledge of supply at 1.1857/1.1352 (unites with long-term trendline resistance [1.6038]).
With reference to the primary trend, price has exhibited clear lower peaks and troughs since 2008.
Daily timeframe:
Partially altered from previous analysis -
Wednesday had EUR/USD address a potential reversal zone (PRZ), derived from a harmonic bearish bat pattern (comprised of an 88.6% Fib ret level at 1.1395, a 161.8% BC projection at 1.1410 and a 161.8% Fib ext. level at 1.1462 [red oval]), and rotate lower into the week’s end, down by 0.30%.
It’s common to see traders sell PRZs and place protective stop-loss orders above the X point, in this case at 1.1495. Common targets, which may hit this week, fall in at the 38.2% and 61.8% Fib ret levels (derived from legs A-D) at 1.1106 and 1.0926, respectively.
In addition to the bearish configuration, the RSI indicator recently exited overbought territory.
H4 timeframe:
Despite an active attempt to topple supply coming in from 1.1415/1.1376 late Wednesday, an area boasting a connection to the lower edge of the daily harmonic PRZ, the candles dipped through 1.1241 (June 9 low), running local sell-stop liquidity and testing support at 1.1226.
The question going forward is 1.1226 enough to tempt buying? Or are we heading to demand at 1.1189/1.1158 (prior supply), drawn close by neighbouring demand at 1.1115/1.1139?
H1 timeframe:
Early Friday rebounded off channel support (1.1194) and reclaimed 1.13 to the upside. Things turned sour heading into London, however, forming a shooting star Japanese candlestick pattern (considered a bearish signal) from the 100-period simple moving average. US trade welcomed an animated push back through 1.13, surpassing 1.1250 to complete an intraday ABCD pattern (where legs AB equal CD) at 1.1211 that prompted a recovery play marginally above 1.1250 by the day’s end.
RSI traders will also note the value edged into oversold territory as we finalised the ABCD pattern.
Structures of Interest:
Long term:
Monthly supply at 1.1857/1.1352 in play, as well as the daily harmonic bat pattern’s PRZ capping upside mid-week, points to a move lower going forward, at least until the 38.2% daily Fib ret level at 1.1106 enters the setting.
Short term:
Contrary to the higher timeframes, analysis based on the H4 and H1 introduce the possibility of an intraday recovery to 1.13, converging with H1 channel resistance (prior support – 1.1194).
On account of the above, a short-lived move to the upside could materialise today, test 1.13 on the H1 and turn lower to align with higher-timeframe direction, creating a reasonably appealing bearish scenario.
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