EUR/USD: multi-timeframe perspective for the week
First of all, taking a look at the DAILY timeframe chart of EUR/USD, we may notice the inability of the price to break below the 1.065 - 1.068 area of support and a formation of a huge wick candle. What is more, an ascending channel can be identified and we can observe that the price is stuck in a consolidation box at the lower barrier of it. It's a "break or bounce" scenario at the moment, and we need to use the assistance of other timeframes in order to get further confirmations.
Therefore, we are zooming into the H4 timeframe graph and continuing our analysis. The 1.066 area of support has been penetrated both to the downside and to the upside in the span of the past few trading days. Before the market closure last Friday, the price was able to impulse towards the North by breaking the previous Lower Low point. Technically, taking a deep look, we may notice that a Left Shoulder and a Head have been formed. Now, we need to see another Shoulder in order for our Inverse Head&Shoulders pattern to be completed and confirmed. Thus, we are having close eyes on the 1.066 area of previous resistance now turned into support that lines up with the 50% Fibonacci retracement level for entering long positions and aiming for the zone highlighted on the graph.
One thing should be taken into consideration: ONLY IF the price manages to retrace the 1.066 level and form a solid right shoulder pattern, our BUY idea will be valid. We are gonna be reactive instead of being predictive. Hence, we will keep monitoring the price development and patiently wait for our entry criteria to be met before executing positions.
No rush. Plot your zones and wait for the price to come to you. Once the price is at your zone, wait for your entry criteria to be met before entering the trade.
Have a great trading week
Investroy
Therefore, we are zooming into the H4 timeframe graph and continuing our analysis. The 1.066 area of support has been penetrated both to the downside and to the upside in the span of the past few trading days. Before the market closure last Friday, the price was able to impulse towards the North by breaking the previous Lower Low point. Technically, taking a deep look, we may notice that a Left Shoulder and a Head have been formed. Now, we need to see another Shoulder in order for our Inverse Head&Shoulders pattern to be completed and confirmed. Thus, we are having close eyes on the 1.066 area of previous resistance now turned into support that lines up with the 50% Fibonacci retracement level for entering long positions and aiming for the zone highlighted on the graph.
One thing should be taken into consideration: ONLY IF the price manages to retrace the 1.066 level and form a solid right shoulder pattern, our BUY idea will be valid. We are gonna be reactive instead of being predictive. Hence, we will keep monitoring the price development and patiently wait for our entry criteria to be met before executing positions.
No rush. Plot your zones and wait for the price to come to you. Once the price is at your zone, wait for your entry criteria to be met before entering the trade.
Have a great trading week
Investroy