ICmarkets
Long

Quick follow-up on the Euro...

FX:EURUSD   Euro/U.S. Dollar
566 0 5
The market opened five pips lower than Friday’s close at 1.1331. As you can see, early morning trade began at a steady pace; it was only once London opened for business did we see any noteworthy action. Price faked above the current 4hr supply at 1.1363-1.1332, likely stopping out a ton of traders attempting to fade this zone in the process. Not long after this, the EUR aggressively sold off down to retest psychological support 1.1300, which has held firm so far.

With offers likely cleared from the aforementioned 4hr supply above, and price showing support at 1.1300, would we consider this to be a stable enough platform to consider buys from today? Well, initially, we were hoping price would drive north up to 1.1400 to complete an AB=CD pattern (see our previous report http://blog.icmarkets.com/monday-14th-september-weekly-technical-outlook-and-review/) but with this recent movement our outlook has changed. Check out the black arrows on the 4hr chart, can you see there is somewhat of a symmetrical four-drive pattern setting up? Therefore, if price remains above 1.1300 today, we may get the chance to buy (with confirmation) the forth drive up to 1.1400…

Supporting this trade, there’s potential support forming on the daily timeframe at 1.1313. Even though an indecision candle formed here during yesterday’s trade, support still held thus making it a legit line in our opinion. Assuming that the buyers manage to maintain their position above 1.1313 this week, we see very little resistance overhead until supply at 1.1712-1.1614. The only downside to buying 1.1300 is seen on the weekly chart. Price is currently trading within supply, but with last week’s buying interest around the underside of this zone, we’re confident that a 100-pip move from 1.1300 to 1.1400 is still possible.

Levels to watch/live orders:
• Buys: 1.1300 Tentative – confirmation required (Stop loss: dependent on where one confirms this level).
• Sells: Flat (Stop loss: N/A).


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