Potential intraday recovery on EUR/USD out of AB=CD pattern
Monthly timeframe:
Brought forward from previous analysis:
Long term, EUR/USD’s primary trend has faced a southerly trajectory since topping in mid-July 2008, at 1.6038. Activity on the monthly chart remains languishing south of a resistance area at 1.2048/1.1653 as well as a trendline resistance (1.6038).
Downside risk remains on this timeframe until connecting with the support area marked at 1.0742/1.0333.
Daily timeframe:
The beginning of February witnessed a retest occur around the underside of a central resistance zone at 1.1109/1.1066, followed by six consecutive daily bearish candles. Monday observed a violation of a support zone at 1.0962/1.0925, with the pair clocking a session low of 1.0891 on Tuesday and printing a mild recovery. Traders are likely expecting 1.0962/1.0925 to offer some form of resistance today.
To the downside, the next area of support falls in close by around 1.0822/1.0879, boasting history as far back as March 2016.
The RSI also recently drove into oversold territory, forming hidden bullish divergence. Hidden bullish divergence occurs when the RSI Indicator forms a lower low and price produces a potential higher low.
H4 timeframe:
While the daily timeframe has price testing a possible resistance area at 1.0962/1.0925, H4 reveals we may be dealing with an AB=CD bullish pattern at 1.0906, with waves A-B of similar length to C-D and sited a few points ahead of a 161.8% Fibonacci extension point at 1.0879.
Modest buying occurred from 1.0879/1.0906 Tuesday, recently forming a robust bullish candle that closed a whisker off its highs. Should H4 price brush aside the fact we have monthly price eyeing lower levels and a daily resistance area in the mix, the initial upside target out of an AB=CD bullish formation generally sits around the 38.2% Fibonacci retracement of legs A-D: 1.1000.
Brought forward from previous analysis:
Long term, EUR/USD’s primary trend has faced a southerly trajectory since topping in mid-July 2008, at 1.6038. Activity on the monthly chart remains languishing south of a resistance area at 1.2048/1.1653 as well as a trendline resistance (1.6038).
Downside risk remains on this timeframe until connecting with the support area marked at 1.0742/1.0333.
Daily timeframe:
The beginning of February witnessed a retest occur around the underside of a central resistance zone at 1.1109/1.1066, followed by six consecutive daily bearish candles. Monday observed a violation of a support zone at 1.0962/1.0925, with the pair clocking a session low of 1.0891 on Tuesday and printing a mild recovery. Traders are likely expecting 1.0962/1.0925 to offer some form of resistance today.
To the downside, the next area of support falls in close by around 1.0822/1.0879, boasting history as far back as March 2016.
The RSI also recently drove into oversold territory, forming hidden bullish divergence. Hidden bullish divergence occurs when the RSI Indicator forms a lower low and price produces a potential higher low.
H4 timeframe:
While the daily timeframe has price testing a possible resistance area at 1.0962/1.0925, H4 reveals we may be dealing with an AB=CD bullish pattern at 1.0906, with waves A-B of similar length to C-D and sited a few points ahead of a 161.8% Fibonacci extension point at 1.0879.
Modest buying occurred from 1.0879/1.0906 Tuesday, recently forming a robust bullish candle that closed a whisker off its highs. Should H4 price brush aside the fact we have monthly price eyeing lower levels and a daily resistance area in the mix, the initial upside target out of an AB=CD bullish formation generally sits around the 38.2% Fibonacci retracement of legs A-D: 1.1000.