ICmarkets

EUR.USD: Weekly outlook and review...

FX:EURUSD   Euro Fx/U.S. Dollar
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Weekly recap:

Last week’s action saw the EUR currency print a bullish engulfing candle on the weekly timeframe , closing 45 pips above the prior week’s close (1.1108) at 1.1153. Despite this, price still remains somewhat capped between a weekly demand area at 1.0519-1.0798 and a weekly supply zone at 1.1532-1.1278. The daily timeframe on the other hand, shows that the market was supported by a daily demand area coming in at 1.0886-1.0978, which eventually forced price north up to a distinct daily swap (resistance) barrier at 1.1148.

Moving down to the 4hr timeframe, we can see how even the prospect of a Greek deal lifted the EUR during Friday’s sessions. This move took out several 4hr technical levels during this onslaught, and only really saw a reversal once price tested 1.1200.

The EUR pair once again begun the week on its back foot. Price gapped 60 pips south at the open 1.1093 breaking below the 1.1000 handle. This move was likely fuelled by weekend talks regarding Greece, which once again failed to secure a bailout deal. Following the open, current action shows that the bulls are pressing forward in early trade, which will likely see the weekend gap filled relatively quickly.

With regards to trading this pair, we’re afraid that technicals may suffer as rumors will likely continue to flood the wire today/this week, so any trading opportunities we see on the EUR/USD             will only be considered with a smaller than usual position size. With all of the above taken into consideration, here are the levels we are watching for the time being:
For buys:

1. The mid-level number 1.1050. A small bounce north could be seen from here, how big of a bounce though will likely depend on how price approaches this barrier.
2. The round number 1.1000. Judging by Thursday’s aggressive rebound seen from this level, we believe there could potentially be some unfilled buy orders lurking here, hence well worth             keeping an eye on.

For sells:

1. The round number 1.1200. This level saw a nice reaction during the N.Y afternoon session on Friday, which could repel the market once more should it be visited again this week.
2. The 4hr resistance barrier seen at 1.1233. Several attempts were made to trade above this number but each time it held strong, thus making it a level to be respected.

Levels to watch/live orders:

• Buys: 1.1050 Tentative – confirmation required (Stop loss: dependent on where one confirms this level) 1.1000 Tentative – confirmation required (Stop loss: dependent on where one confirms this level).
• Sells: 1.1200 Tentative – confirmation required (Stop loss: dependent on where one confirms this level) 1.1233 Tentative – confirmation required (Stop loss: dependent on where one confirms this level).


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