As you may recall, on May 15th, I highlighted a break out of a pattern within a pattern (some might call it , others a , while EW traders might call it a diagonal triangle, but it all works out the same) when price fell below its support (see circled pink highlight in the chart). I inscribed a dashed blue line to highlight the most-probable ensuing price action. Turns out that price did just that for the most part, as it is now readying to seek and define an upper - See original chart and analyses here:
Typically, that can be defined by the graphics already in place, namely looking at the possibility that price would rally to the underside of the , which once acted as support and would probably then act as resistance.
Another possibility is the 1.37705 level, which looked under a finer granular timeframe (try, say a H4 level), you might see that at the candle that broke below the support that defined the triangle, the next two candles failed to cross above that defining 1.37705 level.
Besides these two probabilities, I am not foreseeing any other technical obstacles as far as upwards movement defining resistance.
Now, looking at the support ahead, the lines that I drew remain in force and intact. The long-term analysis that I provided back on May 15th remain intact as well. The direction remains , and the outlook still favors bears over bulls.
Data from ECB has left very little room for price action that was not already discounted in the current price action, leading up to a shallow reactive day, hence the long shadow imprinted underneath the candle as of this writing. I would expect more concerning news from Europe, and perhaps more clues from the bond market (i.e.: an increase in yields, reflecting growing uneasiness, which would reflexively push the USD to higher highs and increase the chance towards rate increases in the future).
So, keeping pulse on technicals, fundamentals and predictive/forecasting model, this triad heavily favors appetite for the time being.
Predictive Analysis & forecasting
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$EURUSD is moving steadily to bearish target defined last June 2014:
via @tradingview | $EUR $USD #ECB #forex
$EURUSD: Bears going to Bastille Day? Still marching on per forecast:
via @tradingview | $EUR $USD
$EURUSD Coming To Geometric Support Levels:
The Euro continues to point towards lower lows in smaller timeframes. However, in this weekly chart, a potential relief rally to 1.37705 has become less of a probability. Yet, a bearish picture is not quite yet full in this L/T weekly chart, unless certain levels of support are giving in, namely the 1.35019 support.
Once broken, this support level would open the floor below and grant consideration to the bearish forecast target defined in the chart. Until this technical event occurs, I would guard against any one-sided directional opinion. My personal consideration here is that of risk potentials, and the diminution of the foreseen risks based on clear and evident event, if and only if I had to rely on price action alone, which I rarely do, except when giving consideration to historical structures, which provide important technical handles when attempting to plan an objective plan.
Combined with the predictive/forecasting model, once that structural condition is met as it did in this earlier $EURUSD chart ( ), where a simple trendline sufficed to give the directional model credibility, then all there is to do is let the target come into contact with the crackling light of the evolving price candle across the chart.
Another consideration here is a moderate-complexity geometry encountered in the rising wedge, as in this similar chart ( ), where price is coming to contact with the supporting underbelly of that geometry.
I would expect significant supportive bullish impact at these levels, were it be due to a Fibonacci influence, a geometric interference (one chart above demonstrates a rising wedge, while the second highlights a slightly more elaborate Wolfe Waves pattern within a rising wedge), or a mere trendline imposition.
Overall, expect entrenched bulls to pounce at these geometrically defined levels.
Predictive Analysis & Forecasting
However, the model is not yet showing any reversal strength, even though the intuitive interpretation of the chart from any experienced eyeballs would suggest that a rally is overdue.
Again, sought overhead resistance levels are:
1 - 1.35002 - Slightly corresponding to above the 38%-Fib retracement
2 - 1.37750 - Slightly corresponding to above the 50%-Fib retracement
3 - 1.3628 to 1.3661- Slightly corresponding to the 75-88.6-Fib retracement