Weekly gain/loss: + 173 pips
Weekly closing price: 1.2034
Over the course of last week’s trading, the single currency maintained a bullish posture from weekly support pegged at 1.1871. Rallying close to 200 pips on the week, the move chalked up a fresh high of 1.2092 and revisited weekly resistance at 1.2044. Interestingly, the weekly USDX chart shows price violated support at 11854 and now looks poised to press its way down to support marked at 11687 (converges with a long-term trendline support taken from the low 9322). Should this come to fruition, this could lead to the EUR breaking through the current weekly resistance and pushing as far north as the weekly broken Quasimodo line at 1.2287 (the next upside target – not seen on the screen).
Turning our attention to the daily candles, Friday’s movement formed a tasty-looking bearish selling wick that pierced through the current weekly resistance. Although the EUR is trending with a reasonably strong upside bias right now, this candlestick formation has likely garnered some attention. Over on the USDX daily chart, we can see that the unit also touched gloves with a daily channel support extended from the low 12352, but failed to produce much of a bullish buying tail. A selloff from current price (EUR) could see the major retest demand printed at 1.1739-1.1823.
A quick recap of Friday’s trading on the H4 chart shows price topped at 1.2092 during the early hours of Europe, and ended the day in negative territory. To the downside, the next area of interest is the large psychological barrier 1.20, followed closely by a support area positioned at 1.1984-1.1962. In between these two structures, we’ve shaded the area in yellow to represent a potential fakeout zone. Why? Well, psychological numbers have a tendency to be whipsawed (a fakeout), and the yellow area is likely where you’ll see this occur should it happen. A quick glance at the USDX H4 chart, nevertheless, sees price trading from resistance at 11787 with room to stretch as far down at 11728: a H4 Quasimodo support level not seen on the screen. Therefore, there’s a chance we may see EUR H4 bulls come into the fray before connecting with 1.20.
Suggestions: So, let’s run through what we have here:
• Weekly resistance at 1.2044 – strong uptrend.
• Daily pin bar at weekly resistance.
• H4 nearing 1.20 – possible fakeout into a H4 support area at 1.1984-1.1962.
Technically speaking, this is a rather difficult market to trade. No matter which direction one chooses there’s a downside! A long from 1.20 would have you buying in line with the current trend, but at the same time buying into weekly resistance. A sell on other hand is, at least in our view, countertrend, but in line with weekly structure and the daily pin bar.
Personally, given the strength of the uptrend and the lack of selling pressure seen from the noted weekly resistance, we would consider a long from 1.20 if, and only if, a H4 pin bar pierced into the fakeout zone, as drawn on the chart.
Data points to consider: No high-impacting news events scheduled for release today.
Levels to watch/live orders:
• Buys: 1.20 region (looking for H4 price to fakeout through this number and close higher, stop loss: ideally below the fakeout candle’s low).
• Sells: Flat (stop loss: N/A).
Weekly closing price: 1.2034
Over the course of last week’s trading, the single currency maintained a bullish posture from weekly support pegged at 1.1871. Rallying close to 200 pips on the week, the move chalked up a fresh high of 1.2092 and revisited weekly resistance at 1.2044. Interestingly, the weekly USDX chart shows price violated support at 11854 and now looks poised to press its way down to support marked at 11687 (converges with a long-term trendline support taken from the low 9322). Should this come to fruition, this could lead to the EUR breaking through the current weekly resistance and pushing as far north as the weekly broken Quasimodo line at 1.2287 (the next upside target – not seen on the screen).
Turning our attention to the daily candles, Friday’s movement formed a tasty-looking bearish selling wick that pierced through the current weekly resistance. Although the EUR is trending with a reasonably strong upside bias right now, this candlestick formation has likely garnered some attention. Over on the USDX daily chart, we can see that the unit also touched gloves with a daily channel support extended from the low 12352, but failed to produce much of a bullish buying tail. A selloff from current price (EUR) could see the major retest demand printed at 1.1739-1.1823.
A quick recap of Friday’s trading on the H4 chart shows price topped at 1.2092 during the early hours of Europe, and ended the day in negative territory. To the downside, the next area of interest is the large psychological barrier 1.20, followed closely by a support area positioned at 1.1984-1.1962. In between these two structures, we’ve shaded the area in yellow to represent a potential fakeout zone. Why? Well, psychological numbers have a tendency to be whipsawed (a fakeout), and the yellow area is likely where you’ll see this occur should it happen. A quick glance at the USDX H4 chart, nevertheless, sees price trading from resistance at 11787 with room to stretch as far down at 11728: a H4 Quasimodo support level not seen on the screen. Therefore, there’s a chance we may see EUR H4 bulls come into the fray before connecting with 1.20.
Suggestions: So, let’s run through what we have here:
• Weekly resistance at 1.2044 – strong uptrend.
• Daily pin bar at weekly resistance.
• H4 nearing 1.20 – possible fakeout into a H4 support area at 1.1984-1.1962.
Technically speaking, this is a rather difficult market to trade. No matter which direction one chooses there’s a downside! A long from 1.20 would have you buying in line with the current trend, but at the same time buying into weekly resistance. A sell on other hand is, at least in our view, countertrend, but in line with weekly structure and the daily pin bar.
Personally, given the strength of the uptrend and the lack of selling pressure seen from the noted weekly resistance, we would consider a long from 1.20 if, and only if, a H4 pin bar pierced into the fakeout zone, as drawn on the chart.
Data points to consider: No high-impacting news events scheduled for release today.
Levels to watch/live orders:
• Buys: 1.20 region (looking for H4 price to fakeout through this number and close higher, stop loss: ideally below the fakeout candle’s low).
• Sells: Flat (stop loss: N/A).
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