ICmarkets
Long

EUR/USD: Weekly technical outlook and review...

FX:EURUSD   Euro Fx/U.S. Dollar
477 0 2
Weekly view: From this angle, we can see that despite the EUR/USD             reaching highs of 1.1459 last week; price ended the week in negative territory losing forty or so pips into the close 1.1294. Technically, we’re not really surprised by this since let’s not forget that price has been seen loitering within supply at 1.1532-1.1278 for over three weeks now. Should we see a break above this barrier, we can likely expect the EUR to head north towards an ignored Quasimodo level at 1.1745.

Weekly levels to watch this week fall in at: 1.1532-1.1278/1.1745.

Daily view: From the daily scale, it’s clear to see that last week’s sell-off came from the underside of a historically proven swap resistance level seen at 1.1432. This was an area we completely missed in our previous report! From here, the next downside target to keep an eye on is a swap support level at 1.1214, followed closely by another swap support level at 1.1148.

Daily levels to watch this week fall in at: 1.1432/1.1214/1.1148.

4hr view: Friday’s 4hr action saw price initially retest the 1. 1400             handle as support during early trade, which, as you can see, pressured the EUR up to mid-level resistance at 1.1450. Ultimately, we were looking to enter long from 1. 1400             , but unfortunately found little price action on the lower timeframes to confirm bullish strength.

Upon reaching 1.1450, price tanked over 150 pips, closing the week out just below 1.1300! Now, fundamentally, we have no idea why the EUR dropped so hard from here. However, from a technical standpoint, it was an almost perfect sell zone: A bearish Harmonic AB=CD completion point, 1.1450 mid-level resistance and not forgetting where price was positioned at that point on the higher timeframes (see above)!

On account of the points made above, our team ultimately believes the EUR has the potential to decline further this week. Assuming 1.1300 holds as resistance, it’s likely we’ll see bids around the Quasimodo support level at 1.1257 tagged in sometime today. Although this hurdle could provide a bounce for an intraday long, we believe it will eventually give way as traders will be looking to connect with the daily swap (support) level at 1.1214. This daily number not only trades close to psychological support 1.1200, but is also surrounded by a nice-looking 4hr demand zone at 1.1170-1.1210 as well. However, we have no intention in placing pending orders at the above said 4hr areas today/this week, since weekly selling pressure could possibly overwhelm any bids sitting here. Therefore, we’ll opt to wait for lower timeframe confirming price action before considering longs in this market.

Levels to watch/live orders:
• Buys: 1.1257 Tentative – confirmation required (Stop loss: dependent on where one confirms this level) 1.1170-1.1210 Tentative – confirmation required (Stop loss: dependent on where one confirms this area).
• Sells: Flat (Stop loss: N/A).


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