EURUSD: Watching Retrace For Next Upswing Into 1.1450s.

FX:EURUSD   Euro / U.S. Dollar
EURUSD: Major trend is bullish as evidenced by the higher highs and higher lows on the larger time frames, BUT keep in mind, the 1.1450 to 1.1500 area is a MULTI YEAR range resistance (dates back to May 2015), and if not broken, price may drift back toward the middle of the multiyear range (1.08 area).

As a price action trader, I evaluate recent price history, compare it to current price action and anticipate where price can go next based on PROBABILITIES stacking up. Recent price structure indicates strength, and it is reasonable to expect higher prices unless the market PROVES otherwise.

Based on that idea, as long as price stays above the 1.1280 to 1.1325 support ZONE , I would continue to look for longs in general. If that support is broken, it would put the most recent bullish price structure into question and signal a more significant change that would transition my outlook from bullish to neutral.

Examining the most recent bullish swing from 1.1320 to 1.1440, there are two support areas that in my opinion offer good levels to watch for bullish reversals and for possible day trade or swing trade entries. The low 1.1390s and the 1.1340 to 1.1360 area. These supports have a better chance of holding based on the recent strength. The key is to wait for a price pattern reversal on smaller time frames, or at least a candlestick pattern on a larger time frame. If price pushes below 1.1340, that would negate this bullish scenario and will emphasize the significance of the multi year resistance mentioned earlier.

On the upside, if price clears the 1.1430 resistance, then it is much more likely to test the multi year resistance. Current price structure leans more toward this bullish outcome, since it is reasonable to expect price to make a higher high (which can take this pair into the 1.1480s or higher.).

In summary, we are near an important resistance area while current price structure is bullish . The best way to position yourself in this type of situation is wait for a retracement to a noted support, confirm a reversal pattern, and use that level to evaluate your risk/reward using the 1.1450 area as a conservative target.

This analysis is meant to provide perspective for day trading and swing trading strategies. Questions and comments are always welcome.

Comment: New highs made today, testing the multi year resistance.
Marc Principato, CMT |Author: Analyze Any Financial Market Like The Pros Using Price Action| | Cofounder (S.C.)

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