Weekly closing price: 1.1028
Weekly opening price: 1.1049
Weekly view: Although the single currency ranged around 150 pips during the course of last week, price remained relatively unchanged by the close. As far as structure is concerned, weekly movement continues to trade mid-range between a long-term weekly coming in at 1.1533-1.1278, and a long-term weekly support line seen at 1.0796. Both areas have stood the test of time, and with that either one could play a significant role during trading this week.
Daily view: The daily at 1.1224-1.1104 once again did a pretty good job in holding this market lower last week. Since January 2015, this zone has provided the pair strong on numerous occasions. Apart from the referendum low seen at 1.0911, there’s little support stopping price from reaching the daily support chalked in at 1.0824 this week.
H4 view: Bolstered by a string of better than expected US data, the H4 chart shows that the EUR plummeted against its US counterpart on Friday, consequently wiping out any gains the market accrued during the week. Despite the strong close, the pair opened the week around twenty pips above Friday’s close.
The technical picture on the H4 chart is clear. Price has spent the last three weeks chiseling out a decent-sized range fixed between 1.1170-1.1023 (yellow zone). Therefore, this morning’s open is not really a surprise considering price closed the week heavily into the lower edge of this H4 consolidation. Be that as it may, given that the higher timeframe picture suggests lower prices may be seen this week (see above), we feel this H4 range will eventually be breached. Prior to this, however, there are two strong-looking barriers of support on the H4 where price is likely to bounce from:
• The minor H4 Quasimodo support line seen at 1.0984. This line also coincides with a H4 completion point at 1.0979, and sits just beneath the key figure 1.10 (green zone). Collectively, this zone is high-probability area for a bounce to be seen.
• The larger H4 Quasimodo support at 1.0940. Not only did the H4 candles bounce from this line during the ‘Brexit’ fallout (indicating strong support), it also fuses with a H4 88.6% Fib retracement line at 1.0945 and a H4 mid-way support at 1.0950.
Our suggestions: Watch both of the aforementioned H4 support barriers this week for potential long positions. We are confident a bounce will be seen from these areas, but would still advise traders to trade cautiously in light of what’s been noted on the higher timeframes.