ICmarkets

Our take on the EUR so far...

FX:EURUSD   Euro Fx/U.S. Dollar
743 5 9
Starting from the top this morning, the weekly chart shows current movement is lurking within the lower limits of its range between demand at 1.0519-1.0798 and supply drawn from 1.1532-1.1278. Moving down one level to the daily chart , however, price sold off from supply coming in at 1.1072-1.1013 (converges 50.0% Fibonacci level at 1.1011), consequently engulfing three daily candles and setting a bearish tone ahead of the all-important Fed meeting today. Downside targets to keep an eye on fall in at the swap support level drawn from 1.0813, followed by another swap support at 1.0725, and possibly even demand coming in at 1.0519-1.0583.

Turning our attention to the H4 chart, yesterday’s selling which originated from the underside of mid-level resistance at 1.1050 engulfed multiple technical supports before stabilizing four pips above psychological support 1.0900 by the day’s end. It’s widely reported that the Fed will raise interest rates today, which could see this pair depreciate further. However, we trade what we see, not what we think, and right now there appears to be no logical entry into this market, apart from a break above and retest of 1.0936, targeting psychological resistance 1.1000. In spite of this, would you want to buy knowing price has just sold off from daily supply and is NOT YET touching base with the lower limits of the weekly range (see above)? We certainly wouldn’t. Therefore, we’ll remain on the sidelines for now and watch for further developments.
Thanks and very good explanation SND. I always follow your technical analysis.
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I like and always follow your analysis. It's a good perspective view on the longer time frames moves used by institutions.
That retracement today/yesterday ((EUR/USD@1.1059)) follows the 61.8% Fib retracement on the weekly chart from 1.1387 to 1.0516.
How much weight do you place on these Fibonacci levels? Would it be something to consider on this case?
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ICmarkets PRO Baseball350
Thanks for the kind words guys.

@Baseball350, we focus more on structure (supply and demand etc...) more than Fibs, but we have found when a Fib, preferably the 61.8% value, converges with our pre-selected structure, it gives us more confidence to take the trade. However tempting it is to use the Fibo tool on the weekly, we tend not to since we find using it on the H4 and daily is enough.

Hope it helps, if not get back to me and I will try to be more descriptive.

IC markets.
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Thank you for your answer. I think I got it, so basically a Fb level would not undermine an already started trend (weekly) especially so close to demand.
On the other point, you prefer or consider Fb level entries more reliable in the 4H and Daily than weekly levels? At least in this situation.
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ICmarkets PRO Baseball350
No problem. Yes, as you can probably tell, we do most of our trading from the H4, and use the daily and weekly more for direction. Therefore, we focus more on what the Fibs converge with on this timeframe. However, as said in the previous post, we do sometimes look for confluence on the daily with Fibs.

There is certainly not anything wrong with using Fibs on the weekly, it is just our personal preference. We like to keep things as simple as possible.

IC markets.
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