EUR/USD: Technical outlook and review.

FX:EURUSD   Euro / U.S. Dollar
Weekly Timeframe: The weekly timeframe shows that the Euro continues to receive punishment as a major weekly demand area seen at 1.1875-1.2095 has been consumed. This consequently forced the market down towards a major weekly Quasimodo support level seen at 1.1758. Could the buyers see a little action here?

Daily Timeframe: Contrary to what we’re seeing on the weekly timeframe , the daily timeframe is showing signs that the Euro may continue to weaken, as yesterday saw price break below a daily demand area at 1.1776-1.1838. Additionally, below this area we see very little active demand (check out the consumption tails to the far left at 1.1700/1.1659) until price hits the 1.1443-1.1533 area.

4hr Timeframe: The recent selling momentum forced price to close below 1.1800, which resulted in further selling down to the 1.1750 mark – a common reactive point for the Euro . This level was clearly supportive enough to allow the buyers back into play and subsequently rally the market back up to retest 1.1800.

We would like nothing more than to join this down trending market, but we cannot ignore the fact that price is currently trading around a major weekly Quasimodo support level (see above) at the moment; even when the daily timeframe is indicating a further decline is to be expected (see above).

In the event that we see 1.1750 broken, we’d be very interested in selling any retest that is offered, but other than this, our finger is staying off the sell button for the time being. Conversely, buying here is tricky since we have near-term supply coming in at 1.1895-1.1856, which from a risk/reward perspective is not sufficient enough to condone buying the Euro at this point in time.

Current buy/sell levels:

• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).

• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

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