• Weekly closing price: 1.0589
• Weekly opening price: 1.0588
The EUR continued to drive south last week, forcing weekly action deeper into the range seen at 1.0519-1.0798. Granted, the overall momentum on this pair has certainly diminished over the past two weeks, suggesting a last-minute rebound may be on the horizon from here. In the event that the sellers remain dominant, however, we can likely expect the current range demand to be consumed, and prices connect with demand seen just below it at 1.0333-1.0502.
Turning our attention to the , support (now resistance) at 1.0616 was consumed during Thursday’s sluggish trade. As a result, further selling was seen going into Friday’s session, consequently pushing price back down into demand at 1.0519-1.0583 (positioned deep within the weekly range demand at 1.0519-1.0798).
For those who read Friday’s report (http://blog.icmarkets.com/friday-27th-november-daily-technical-outlook-and-review/), you may recall us mentioning that we had our eye on the H4 swap at 1.0636 for a confirmed short. As you can see, price reacted beautifully to this level, but unfortunately the move into this barrier was just too fast for us to find a lower timeframe setup to sell here.
As can be seen from the H4 chart, the market closed the week deep into demand at 1.0569-1.0596, and opened this morning a pip below Friday’s close (see above). As such, we are going to be focusing on the mid-level support 1.0550 for confirmed longs today for the following reasons:
• If you look back in history you’ll see this barrier has provided this market a strong ‘floor’ to trade from on a number of occasions.
• Located within both the above said weekly range demand and daily demand (1.0519-1.0798/1.0519-1.0583).
• Converges nicely with the lower limit of the current pattern taken from the low 1.0674.
The reason for requiring confirmation to buy at 1.0550 simply comes from the clear downtrend this market is in at the moment.
Levels to watch/live orders:
• Buys: 1.0550 Tentative – confirmation required (Stop loss: dependent on where one confirms this level).
• Sells: Flat (Stop loss: N/A).