Tow potential sell zones observed on EUR/USD this morning...
Weekly perspective:
Try as it might, the EUR/USD failed to muster sufficient strength to overthrow merging resistance at 1.1465 and trend line resistance (extended from the high 1.2476) in the opening week of 2019, consequently chalking up a bearish engulfing formation. Further selling from this point has demand at 1.1119-1.1212 to target this week, whereas a rotation north exposes a resistance area parked at 1.1717-1.1862.
Daily perspective:
A closer reading, however, underscores a reasonably firm range between resistance at 1.1455 (converging 61.8% Fibonacci resistance value at 1.1469) and support located at 1.1302 (yellow). Areas of interest outside of this border fall in at resistance drawn from 1.1523 and a demand area coming in at 1.1171-1.1220. It might also interest traders who focus on correlations to note the US dollar index indicates clean support entered the mix at the turn of the year around the 95.76 neighbourhood.
H4 perspective:
Friday’s non-farm payrolls widely exceeded expectations, adding 312k jobs in December compared to the 179k consensus. Average hourly earnings rose 0.4% last month, beating expectations of 0.3%, while the US unemployment rate ticked higher to 3.9% from 3.7%.
The impact of the US employment report drove the EUR/USD to lower ground, though the move was relatively short lived. The H4 candles established support off December’s opening level at 1.1350, as Fed’s Powell sounded a cautious tone regarding the economic outlook, consequently recouping daily losses.
Areas of consideration:
Having seen the market wrap up the week just south of its 1.14 handle, the research team has eyes on two potential H4 sell zones today/early week (green).
The first comes in at 1.1445/1.1423, comprised of January’s opening level at 1.1445, a H4 resistance area at 1.1440-1.1423 and a 61.8% H4 Fibonacci resistance value at 1.1424. Although this area houses limited higher-timeframe resistance, it’s local confluence will likely be enough to draw in sellers.
The second point of interest this week is seen at 1.1472: a H4 Quasimodo resistance level. Circulating around the top edge of the current daily range (1.1455), and positioned a handful of pips above weekly resistance at 1.1465, the 1.1472 region will likely contain active sellers from all three timeframes.
Stop-loss placement, in terms of the first area, appears best above 1.1445, with the expectation of a H4 close forming beneath 1.14 to reduce risk to breakeven. Beyond 1.14, the next support target falls in around December’s opening level at 1.1350. As for the second zone, stop-loss placement is likely best sited beyond the 1.15 handle as this clears the Quasimodo apex (1.1496). The first area of trouble from 1.1472 is expected to emerge around January’s opening level mentioned above at 1.1445.
Traders are urged to consider risk/reward considerations prior to pulling the trigger.
Try as it might, the EUR/USD failed to muster sufficient strength to overthrow merging resistance at 1.1465 and trend line resistance (extended from the high 1.2476) in the opening week of 2019, consequently chalking up a bearish engulfing formation. Further selling from this point has demand at 1.1119-1.1212 to target this week, whereas a rotation north exposes a resistance area parked at 1.1717-1.1862.
Daily perspective:
A closer reading, however, underscores a reasonably firm range between resistance at 1.1455 (converging 61.8% Fibonacci resistance value at 1.1469) and support located at 1.1302 (yellow). Areas of interest outside of this border fall in at resistance drawn from 1.1523 and a demand area coming in at 1.1171-1.1220. It might also interest traders who focus on correlations to note the US dollar index indicates clean support entered the mix at the turn of the year around the 95.76 neighbourhood.
H4 perspective:
Friday’s non-farm payrolls widely exceeded expectations, adding 312k jobs in December compared to the 179k consensus. Average hourly earnings rose 0.4% last month, beating expectations of 0.3%, while the US unemployment rate ticked higher to 3.9% from 3.7%.
The impact of the US employment report drove the EUR/USD to lower ground, though the move was relatively short lived. The H4 candles established support off December’s opening level at 1.1350, as Fed’s Powell sounded a cautious tone regarding the economic outlook, consequently recouping daily losses.
Areas of consideration:
Having seen the market wrap up the week just south of its 1.14 handle, the research team has eyes on two potential H4 sell zones today/early week (green).
The first comes in at 1.1445/1.1423, comprised of January’s opening level at 1.1445, a H4 resistance area at 1.1440-1.1423 and a 61.8% H4 Fibonacci resistance value at 1.1424. Although this area houses limited higher-timeframe resistance, it’s local confluence will likely be enough to draw in sellers.
The second point of interest this week is seen at 1.1472: a H4 Quasimodo resistance level. Circulating around the top edge of the current daily range (1.1455), and positioned a handful of pips above weekly resistance at 1.1465, the 1.1472 region will likely contain active sellers from all three timeframes.
Stop-loss placement, in terms of the first area, appears best above 1.1445, with the expectation of a H4 close forming beneath 1.14 to reduce risk to breakeven. Beyond 1.14, the next support target falls in around December’s opening level at 1.1350. As for the second zone, stop-loss placement is likely best sited beyond the 1.15 handle as this clears the Quasimodo apex (1.1496). The first area of trouble from 1.1472 is expected to emerge around January’s opening level mentioned above at 1.1445.
Traders are urged to consider risk/reward considerations prior to pulling the trigger.
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