ICmarkets
Short

Our take on the EUR...

FX:EURUSD   Euro Fx/U.S. Dollar
212 0 3
Another wet and rainy day for the EUR yesterday helped the pair record its fifth consecutive daily loss. The single currency smashed through both daily support at 1.1122 and also psychological support 1.1100, before changing tracks going into the U.S open (likely due to positive unemployment U.S. data) and retesting the underside of the daily support as resistance.

From our perspective, this pair is in a little bit of a tricky spot right now. Weekly flow is currently being held lower by supply drawn from 1.1533-1.1278, whilst daily action recently touched gloves with the top-side of demand at 1.1072-1.1013. In addition to this, below current price on the H4, there sits a support penciled in at 1.1059.

Based on recent price action there is little that jumps out to us this morning. The best, and in our opinion, most logical setup to watch for would be a break below and retest of the aforementioned H4 support (see black arrows), targeting the large psychological support 1.1000 (single take-profit target due to weekly support lurking just below this number at 1.0983). Granted, this trade would mean one shorting into daily demand, but when there’s weekly supply backed by daily resistance assisting downward flow, we feel the odds would be in our favor here.

Levels to watch/live orders:

• Buys: Flat (Stop loss: N/A).
• Sells: Watch for bids to be consumed around 1.1059 and look to trade any retest from this area thereafter (lower timeframe confirmation required).
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