ICmarkets

EUR/USD weekly technical outlook and review...

FX:EURUSD   Euro Fx/U.S. Dollar
432 2 6
Following the bullish weekly pin-bar candle that formed just above the weekly ascending trendline (1.0461), the EUR currency extended higher last week, gaining close to 150 pips into the close 1.1107. Consequent to this move, price is now trading mid-range on the weekly timeframe . Buyers and sellers are not only capped by weekly demand and supply (1.0519-1.0798/1.1532-1.1278), but are also seen compressing between two weekly trendlines (1.0461/1.1532) painting a potential bearish pennant . Turning our attention to the daily timeframe , we can see that after a steep five-day rally from around the 1.0880 mark price hit a ceiling of offers on Wednesday between 1.1233/1.1148.

Looking at the 4hr timeframe, the pair appears to be in the process of forming a tight 4hr bullish pennant (1.1212/1.1079) held together by two psychological limits, 1.1200 and 1.1100. Other than this though, it was a rather uneventful Friday.

Transferring into a new week, trade opened six pips higher this morning at 1.1113. In view of price currently trading at both round-number support 1.1100 and also the lower limit of a 4hr bullish pennant formation (1.1079), where do we go from here?

Well, considering that the weekly timeframe shows room to continue advancing north this week up to at least the lower boundary of the aforementioned weekly supply zone , we could look to enter long at the market’s current position. Be that as it may, price is presently showing resistance on the daily scale (see above) and also room to move south at the moment, so one certainly needs to tread carefully here. That being the case, here is what we have noted so far:

• Look for CONFIRMED long entries at the 1.1100 barrier today. Expect price to fake lower, however, down to 1.1082. Stop losses would be best placed five pips below this number for safety even with confirmation. Targets for this trade would be the upper limit of the 4hr bullish pennant , followed closely by 1.1200 and 1.1233 – a daily Quasimodo resistance level . Both 1.1200 and 1.1233 could make for very nice sell zones this week, so do keep these numbers on your watchlists.

• In the event that 1.1082 gives way, there may be a potential intraday short trade on the retest of this number down to 4hr demand at 1.1009-1.1039. Waiting for lower timeframe confirmation following the retest would be advised.

Levels to watch/live orders:

• Buys: 1.1100 (Stop loss: ideally five pips below 1.1082).
• Sells: Watch for 1.1082 to be consumed and then look to enter on a retest of this number (confirmation required) Note that 1.1200 and 1.1233 are potential sell levels.


Hi IC, I note that you make no reference to the daily double bottom. Any reason for this? Is this not a pattern you look for? Personally I'm looking for this week to confirm the Bullish weekly pin bar and then the potential breakout through September. I'd be interested in your thoughts, do you remain bearish until weekly supply is taken out?
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ICmarkets PRO Cryptoelite
a year ago
Hi S,

We many comment on where a double bottom/top is forming, but rarely trade them. And yes, we remain bearish until our noted weekly supply is taken out.

IC markets
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