Yellow zones- critical zones based on the monthly time frame
Red zones- critical zones based on the daily time frame
Red lines – critical zones based on the 1h time frame
From the latest EURFX COT report we can see than there is an increase in the short contracts since last week. Till last week we were at a record numbers for long contract position, so a change in the direction is very likely to happen soon, but still bulls must be respected since they are in a strong position.
Since the beginning of July, we are in an “almost parallel” channel. Yesterday it got confirmed by the support that was received from the bottom trendline, the strong psychological 200 EMA and the 0.618 Fibonacci retracement level . Now we are once again in the monthly critical area.
There are 2 scenarios and in both of them the price will successfully reach the upper-trendline (the crucial 1.14000 mark) and then it will go near the point where the bottom-trendline crosses with the support/resistance line from the previous high/current higher lows (1.13283).
1. A Head & Shoulders pattern is created- when we have this as a confirmation, most likely the price will break the channel and create new lower highs along the different retracement levels towards the 1.19000 area.
2. After the price reaches the bottom-trendline- it can once again make a move towards the upper one and it can eventually break it. If it does, pretty soon a rejection from the monthly critical will happen.
Happy Trading!
Red zones- critical zones based on the daily time frame
Red lines – critical zones based on the 1h time frame
From the latest EURFX COT report we can see than there is an increase in the short contracts since last week. Till last week we were at a record numbers for long contract position, so a change in the direction is very likely to happen soon, but still bulls must be respected since they are in a strong position.
Since the beginning of July, we are in an “almost parallel” channel. Yesterday it got confirmed by the support that was received from the bottom trendline, the strong psychological 200 EMA and the 0.618 Fibonacci retracement level . Now we are once again in the monthly critical area.
There are 2 scenarios and in both of them the price will successfully reach the upper-trendline (the crucial 1.14000 mark) and then it will go near the point where the bottom-trendline crosses with the support/resistance line from the previous high/current higher lows (1.13283).
1. A Head & Shoulders pattern is created- when we have this as a confirmation, most likely the price will break the channel and create new lower highs along the different retracement levels towards the 1.19000 area.
2. After the price reaches the bottom-trendline- it can once again make a move towards the upper one and it can eventually break it. If it does, pretty soon a rejection from the monthly critical will happen.
Happy Trading!