On the EUR/USD , price action has been slowly moving upwards off March 2015 year to date lows, since falling off May 2014 year to date highs. If we draw a Fibonacci line from the May 2014 highs, to March 2015 lows, an initial retracement break through occured on the 0.23 line marking the confirmation of our sequence. Shortly after we watch the bears hold back the bulls from the 0.38 line. Bears begin pushing price action below the 0.23 line.
Now I want to look at the 4 hour chart, which is presented in this idea. Off the March 2015 low, you can draw an as shown, providing us with zones. The first thing we notice is a steady upwards climb since the March 2015 low. With strong demand on lower channels, bulls have successfully kept price action on a steady upwards trend. Our third wave pictured above, was resisted by Andrews 1st line of resistance on four occasions. Shortly after the 4th test, bears took control driving prices down to Andrews first line of support. Presently, price action is testing the 0.23 Fibonacci line. Combined with a Gravestone candle resting on both the 0.23 fib line and the first line of Andrews support, there may be significant price action in either direction.
To turn our focus to fundamentals. In the short term, the EUR/USD will most likely be affected by political developments in Greece. Strong is largely produced by the unresolved Greece debt crises.
In recent FOMC meeting minutes, one out of ten members agreed to hike US interest rates in June. we are seeing a willingness to wait a few more meetings, amidst speculation of a September rate increase. Such a rate increase may lend significant strength to the USD Dollar. Markets moved little after this meeting, indicating traders had already discounted into price action a neutral stance.
I would be looking to take a long position if price action closed above both Andrews first line of support and the Fibinocci 0.23 line. I would be looking to take a short position if we close below. My entry time will be based off the London open, when we see an initial rally breaking either above or below these lines, I would consider a small hedge, in case market makers decide to stop hunt and fake a trend.
Bulls did take control, pushing the price above our 0.23 line, and Andrews first line of resistance to 0.61, A reversal in sentiment was marked by candles at the 0.5. In which a technical set up appeared for the bears. These marked a continuing downwards movement to Andrews second line of support.
Depending on upcoming Greece Debt Proposals, we will look to go long while in the if news looks positive, or go short is news is and price action drops below Andrews second line of support.
2015/07/23 - The EuroDollar has bounced off of recent lows, these recent rallies have been met with trader sell offs as they take short term profits.
A Sentimental analysis may produce a contrarian view of heard sentiment, giving us further reason to watch for a potential rally. We strongly tested the major resistance line at 1.10 today. If we see a break, a strong rally could follow fueled by confidence from the bulls, pushing traders to further close short positions.
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