EUR/USD technical outlook and review...

FX:EURUSD   Euro / U.S. Dollar
382 0 7
Using a top-down approach this morning shows that weekly action, despite the recent rally, still remains consolidating around the base of supply drawn from 1.1532-1.1278. In the event of a break above this barrier, the ignored Quasimodo resistance level at 1.1745 would be the next limit to reach. From the pits of the daily timeframe , however, price ever so slightly closed above the Quasimodo resistance level given at 1.1372 yesterday, thus potentially clearing the runway north for further upside towards a major swap resistance level at 1.1432.

Turning our attention to the 4hr scale shows that the swap demand base at 1.1366-1.1349 supported the EUR during yesterday’s sessions. This forced the EUR higher but failed to close beyond the 1.1400 handle. With stops now likely taken out above 1.1400, the path north above this figure is possibly free up to Quasimodo resistance drawn from 1.1440. Consequent to this, we see two possible scenarios playing out today:

1. The close above the aforementioned daily Quasimodo resistance may attract further buying today. This, in turn, will likely push price above 1.1400 up to 1.1440 – the Quasimodo resistance mentioned above. Considering that this level ties in nicely with the aforementioned (major) daily swap resistance level , a possible (confirmed) short may present itself from here should price reach this high.

2. 1.1400 may still hold firm. The stops taken from above this figure could be enough liquidity to continue pushing this market south today. That being the case, we’d then look for price to take out bids around the aforementioned 4hr swap (demand) area and top-side of the upward channel (1.1294). Should the above come to fruition, there may be an opportunity to trade this pair if price retests the broken area before descending lower (see black arrows).

Levels to watch/live orders:

• Buys: Flat (Stop loss: N/A).
• Sells: 1.1440 Tentative – confirmation required (Stop loss: dependent on where one confirms this level) watch for bids at 1.1366-1.1349/top-side of upward channel to be consumed and look to enter on any retest seen at this area (confirmation required).

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