ICmarkets
Long

Our thoughts on the EUR...

FX:EURUSD   Euro Fx/U.S. Dollar
175 0 6
Across the board, the US dollar             declined in value yesterday, resulting in the EUR pulling back and testing the key figure 1.10 going into the US session. To our way of seeing things, 1.10 looks vulnerable. Our reasoning lies within the higher-timeframe structures. Over on the weekly chart, price is currently shaking hands with a support level coming in at 1.0970, while down on the daily chart , the pair is now seen crossing swords with a support area formed at 1.0909-1.0982. The next upside target on the higher timeframes is a daily resistance area drawn from 1.1224-1.1072.

Our suggestions: While to many traders, a bounce lower from the 1.10 neighborhood is a logical scenario. Nevertheless, we would have to humbly disagree here given the situation over on the bigger picture (see above). As such, we’re looking for a decisive CLOSE ABOVE 1.10 today, as this will likely do two things. Firstly, confirm upside strength from the aforementioned higher-timeframe supports, and secondly, open up the floodgates for price to challenge the H4 mid-way resistance 1.1050/H4 resistance1.1075. Remember guys, this H4 resistance also represents the underside of the daily resistance area (1.1072) we mentioned above: the next upside target on the higher timeframes. Therefore, expect some opposition around this region.

A close above 1.10 followed by a retest that holds firm would, at least in our book, be sufficient enough to condone a long entry in this market, targeting 1.1050/1.1075. Fundamentally, however, we have US CPI             data scheduled to hit the wire at 12.30pm GMT today, so do remain vigilant around this time!

Levels to watch/live orders:

• Buys: Watch for a decisive close above 1.10 followed by a firm retest as support (Stop loss: beyond the supporting candle).
• Sells: Flat (Stop loss: N/A).
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