EURUSD: Best buy long term but 4H MA200 needs to break

EURUSD hit the bottom of the long term Channel Up, as well as the 1D MA50, turning the 1D technicals red (RSI = 46.112, MACD = 0.003, ADX = 28.557) for the first time since January 6th. That was coincidentally the last Higher Lows at the bottom of the Channel Up which kick started a +4.20% rally. The previous Higher Lows also made a +4.20% rally so it is a recurring sequence.

Being also on S1, which is holding, we have entered a long aiming just under a new +4.20% projection (TP = 1.11000). The only obstacle is the 4H MA200 which is resisting rather intensively. Failure to break it validates the Jan 3rd - Jan 6th 4H RSI bottom formation, which means that there is one last low to be made before rebounding. We expect that to be on top of S2 near 1.0600, which will be our 2nd buy entry but with a lowered target (TP = 1.1000).

If the bottom of S2 breaks, the uptrend is negated and we will turn net short first to S3 and then to the 1D MA200.


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