themarketzone

Heading to re-test top of trading range

FX:EURUSD   Euro Fx/U.S. Dollar
$EURUSD's price reaction to last Thursday's ECB meeting was really interesting.

It started with a sell off from 1.1 that was, at that moment, still a resistance zone. In a special pre-ECB letter to my members I wrote that 1.1 was our key zone and 1.085 is the nearest support to pay attention to and take profits at and indeed $EUERUSD reached 1.085 and turned higher from there during the ECB's press conference.

Eventually what we've got is a bullish False Break scenario ( EURUSD             spiked below the uptrend line and closed back above it) that may lead $EURUSD towards 1.14 and potentially towards 1.17 to complete a bearish AB=CD pattern (see chart)

As it looks right now, $EURUSD is heading to test the top of its weekly trading range – 1.14.
If $EURUSD will overcome this weekly resistance zone and will reach 1.17 to complete a bearish AB=CD pattern , it will mean that the weekly bottom $EURUSD has been forming since early 2015 was breached and that $EURUSD is finally on its way towards its longer term correction targets, way up above near 1.22 and 1.24

As per the short term options – 1.1 is now a support zone to try and buy $EURUSD towards 1.14
The support zone includes 3 SMA lines, a strong structure and the daily uptrend line.
The bears should wait for the price to reach 1.14 and will allow them to try and short this bearish weekly resistance zone.

Tomer, The MarketZone
This analysis is part of the Weekly Markets Analysis newsletters

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Tomer J,
The Market Zone - You trading Edge
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