EURUSD Weekly Chart - How to Trade

When the price reached 1.25000 level, we got a bearish divergence which informed us about possible trend reversal. The market could not break this resistance level and we saw a falling to the strong support zone formed by SMA100 and 1.15000 support level. The price bounced from this zone and RSI confirmed the price reversal. What's next? We have 2 possible variants of the market movement which can give us new trading opportunities.

The 1st variant we have, it's based on reversal signals from this support zone which we can get from the weekly and lower timeframes. If the price continues the uptrend, it will be able to reach at least 1.20000 level and even try to move higher to the previous market high at 1.25000 level. For this the price will have to break 1.20000 resistance and DMI will have to confirm the strength of bulls.

The 2nd variant is based on a breakout below the support zone. We had the same structure when the price bounced from 1.05000 support level and moved upward to SMA100. The price could break it after several unsuccessful attempts and we saw a new uptrend. This time we can have the same market movements but in other direction. If the price breaks the support, we should be ready to see the falling to 1.10000 support at least. Breaking below this support will push the market lower to 1.05000 level.

What about signals from indicators based on the weekly chart?
- RSI confirmed the price reversal from the support zone
- MACD histogram supports the upward movement
- MAD lines are going to support the upward movement
- DMI is bearish but ADX line falls. It tells us that bears are not so strong now and we can open long trades based on confirmed reversal signals.



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