EUR/USD:
A combination of broad-based USD bidding and ECB President Draghi highlighting recent economic developments have been weaker than forecasts, weighed on the single currency Tuesday. Down 0.48% on the day, the EUR/USD’s H4 candles broke through and retested January’s opening level at 1.1445 as resistance, and eventually whipsawed through 1.14 into the close.
The move to lows of 1.1382 likely tripped a truckload of stop-loss orders from traders attempting to fade 1.14, potentially clearing the path south towards December’s opening level plotted at 1.1350.
The H4 timeframe’s bearish vibe is also echoed higher up on the curve. Weekly resistance at 1.1465 remains defensive, opening up the possibility of further selling towards weekly demand at 1.1119-1.1212. In conjunction with weekly flow, daily action also recently crossed under support at 1.1455 (now acting resistance), consequently exposing support priced in at 1.1302.
Areas of consideration:
In the event buyers regain a foothold above 1.14, the research team notes possible shorting opportunities between 1.1465/1.1445 (green – comprised of the weekly and daily resistance levels as well as January’s opening level). The first downside target from this area is set around 1.14, though further selling beyond this number is high probability.
Should the H4 candles continue exploring lower ground from current price and retake 1.14 to the downside, however, traders are then free to look for shorting opportunities (preferably on the retest of 1.14 as resistance) towards December’s opening level mentioned above at 1.1350 as an initial take-profit target.
Today’s data points: Limited.
A combination of broad-based USD bidding and ECB President Draghi highlighting recent economic developments have been weaker than forecasts, weighed on the single currency Tuesday. Down 0.48% on the day, the EUR/USD’s H4 candles broke through and retested January’s opening level at 1.1445 as resistance, and eventually whipsawed through 1.14 into the close.
The move to lows of 1.1382 likely tripped a truckload of stop-loss orders from traders attempting to fade 1.14, potentially clearing the path south towards December’s opening level plotted at 1.1350.
The H4 timeframe’s bearish vibe is also echoed higher up on the curve. Weekly resistance at 1.1465 remains defensive, opening up the possibility of further selling towards weekly demand at 1.1119-1.1212. In conjunction with weekly flow, daily action also recently crossed under support at 1.1455 (now acting resistance), consequently exposing support priced in at 1.1302.
Areas of consideration:
In the event buyers regain a foothold above 1.14, the research team notes possible shorting opportunities between 1.1465/1.1445 (green – comprised of the weekly and daily resistance levels as well as January’s opening level). The first downside target from this area is set around 1.14, though further selling beyond this number is high probability.
Should the H4 candles continue exploring lower ground from current price and retake 1.14 to the downside, however, traders are then free to look for shorting opportunities (preferably on the retest of 1.14 as resistance) towards December’s opening level mentioned above at 1.1350 as an initial take-profit target.
Today’s data points: Limited.
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