ICmarkets

EUR/USD: Technical outlook and review...

FX:EURUSD   Euro Fx/U.S. Dollar
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Weekly view – From a long-term standpoint, the downtrend on this pair is still very much intact. It’s only once or if we see a close above the weekly supply area at 1.1532-1.1278 will we be convinced the trend may be shifting direction.

Daily view: The daily timeframe shows that the Euro             continued to march north during yesterday’s session, taking out the daily swap level 1.1143, and potentially clearing the path north for further upside towards a daily Quasimodo cluster zone coming in at 1.1390/1.1421 (located deep within the aforementioned weekly supply area), which, as you can also see converges beautifully with a daily trendline extended from the high 1.1532.

4hr view: Going into yesterday’s European/London session, we can see that the Euro             sold off from the 4hr Quasimodo resistance level at 1.1180 down to the psychological barrier 1.1100. 1.1100, as you can see held firm, and allowed longs to push this market north consequently consuming the 4hr Quasimodo barrier.

From where we’re standing, we see little reason why price will not shake hands with the 4hr supply area seen at 1.1325-1.1302 sometime soon. However, before this happens, we have to be prepared for the possibility that a retracement may be seen down to the recently broken 4hr Quasimodo level, or even the 4hr demand area seen just below it at 1.1078-1.1132. Both of these areas are certainly on our watchlist for potential trades.

Regarding the 4hr supply area at 1.1325-1.1302, one could say this is a nice zone to short from seeing as it converges with the lower limit of the weekly supply area at 1.1532-1.1278. As such, once/if price enters the jaws of this 4hr zone, we’ll closely watch lower timeframe price action for any weakness to take advantage of. The reason we’re not simply placing a pending sell order here is due to the fact that price could ignore this 4hr area completely and head for the 4hr Quasimodo base at 1.1443-1.1411. This area, as you will be able to see by looking at the daily timeframe lines up nicely with the aforementioned daily Quasimodo cluster zone, and as per the daily timeframe , we can see there is ROOM FOR PRICE TO MOVE FURTHER north, hence the reason why we’re not placing a pending sell order around the 4hr supply area at 1.1325-1.1302.

Levels to watch/live orders:

• Buys: 1.1180 (Predicative stop-loss orders seen at: dependent on where one confirms this level) 1.1078-1.1132 (Predicative stop-loss orders seen at: 1.1071).
• Sells: 1.1325-1.1302 (Predicative stop-loss orders seen at: 1.1330).





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