EUR/USD: Technical outlook

FX:EURUSD   Euro / U.S. Dollar
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As can be seen from the H4 chart this morning, the EUR/USD managed to chalk up a close above the key figure 1.10 early on in yesterday’s sessions. However, once London opened their doors for business, price tagged a small H4 supply zone at 1.1040-1.1028 and rotated south, consequently closing back below 1.10. Given this recent action, today’s spotlight is still firmly focused on the H4 Quasimodo line at 1.0940. This barrier is backed by a deep H4 88.6% Fib retracement level at 1.0945, a H4 mid-way support at 1.0950 and a H4 channel support extended from the low 1.1023 (green zone).

Although this region does boast a nice collection of merging structures, we feel this area may be only good for a short-term bounce. The reason being is weekly action shows little support in the market stopping price from reaching a long-term weekly support level coming in at 1.0819. Furthermore, down on the daily chart , apart from the referendum low seen at 1.0911, there’s also little support stopping price from connecting with the aforementioned weekly support level .

Our suggestions: Watch for a bounce from the 1.0940/1.0950 H4 zone today. Whether one waits for lower timeframe confirmation or simply enters at market is of course down to the individual trader. In regard to targets, the most we see this pair bouncing to from here is 1.10, maybe at a stretch to the H4 supply at 1.1040-1.1028.
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