EUR/USD: Technical outlook and review...
Weekly view – From a long-term standpoint, the trend on this pair is still southbound in our opinion, and will only change once price closes above the weekly supply area at 1.1532-1.1278.
Recent action, however, shows that the Euro is now trapped between a weekly swap level seen at 1.1051 and a weekly demand area coming in at 1.0519-1.0798.
Daily view: From this angle, we can see that selling interest came into the market yesterday from within a daily swap area visible at 1.1051-1.0918, erasing any gains the market had picked up on Friday.
4hr view: The recent decline saw the Euro sell off from a combined 4hr supply/round-number area seen at 1.1006-1.0976/1.1000. This move, as you can see forced price to test 1.0900, which has so far held firm. If 1.0900 continues to hold going into today’s sessions, a rally may ensue up to the weekly swap level 1.1051 (supply has likely been consumed around the aforementioned combined 4hr area now). If this does occur, we believe 1.1051 to be a high-probability turning point in the market for the following reasons:
1. It converges with a near perfect AB=CD pattern. The green area (1.1063/1.1049) represents the AB=CD leg distance, and a 1.27 AB Fibonacci extension.
2. The momentum on this timeframe is clearly south at the moment. Check out the pink arrows. Therefore, shorting at the AB=CD completion point would see you trading with current order flow, rather than against it.
If on the other hand a violation of 1.0900 is seen today, this could stimulate a decline in value down towards 1.0800 (essentially back down to the daily swap level region – 1.0819). Despite this, we’d only be interested in trading this move should price retest 1.0900 as resistance and show some form of lower timeframe selling signal.
Levels to watch/live orders:
• Buys: Flat (Predicative stop-loss orders seen at: N/A).
• Sells: 1.1063/1.1049 region [Tentative – confirmation required] (Predicative stop-loss orders seen at: dependent on where one confirms this area).
Recent action, however, shows that the Euro is now trapped between a weekly swap level seen at 1.1051 and a weekly demand area coming in at 1.0519-1.0798.
Daily view: From this angle, we can see that selling interest came into the market yesterday from within a daily swap area visible at 1.1051-1.0918, erasing any gains the market had picked up on Friday.
4hr view: The recent decline saw the Euro sell off from a combined 4hr supply/round-number area seen at 1.1006-1.0976/1.1000. This move, as you can see forced price to test 1.0900, which has so far held firm. If 1.0900 continues to hold going into today’s sessions, a rally may ensue up to the weekly swap level 1.1051 (supply has likely been consumed around the aforementioned combined 4hr area now). If this does occur, we believe 1.1051 to be a high-probability turning point in the market for the following reasons:
1. It converges with a near perfect AB=CD pattern. The green area (1.1063/1.1049) represents the AB=CD leg distance, and a 1.27 AB Fibonacci extension.
2. The momentum on this timeframe is clearly south at the moment. Check out the pink arrows. Therefore, shorting at the AB=CD completion point would see you trading with current order flow, rather than against it.
If on the other hand a violation of 1.0900 is seen today, this could stimulate a decline in value down towards 1.0800 (essentially back down to the daily swap level region – 1.0819). Despite this, we’d only be interested in trading this move should price retest 1.0900 as resistance and show some form of lower timeframe selling signal.
Levels to watch/live orders:
• Buys: Flat (Predicative stop-loss orders seen at: N/A).
• Sells: 1.1063/1.1049 region [Tentative – confirmation required] (Predicative stop-loss orders seen at: dependent on where one confirms this area).
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