Possible bounce from 0.80 region...
Weekly gain/loss: - 94 pips
Weekly closing price: 1.1940
Over the past three weeks, upward momentum has somewhat diminished thanks to the weekly resistance pegged at 1.2044. Despite this, weekly bulls managed to chalk up a mild end-of-week correction last week from weekly support seen below at 1.1871, possibly encouraging buyers into the market. In addition to this, we can see that weekly price over on the USDX formed a nice-looking bearish pin bar off resistance at 11854, and shows room to move down to at least weekly support at 11687 (converges with a long-term weekly trendline support etched from the low 9322).
Since the 29th August, the daily candles have been consolidating between the noted weekly resistance level and a demand coming in at 1.1739-1.1823. Looking at the USDX daily timeframe, however, there’s a possibility that we may see further selling from resistance at 11868, as the next area of interest does not come into view until the 11681-11749 neighborhood (fuses with a channel support taken from the low 12352). As such, this could pressure the EUR up to the weekly barrier sometime this week.
A quick look at recent dealings on the H4 timeframe show US retail sales figures contracted on Friday, immediately forcing the pair higher. As you can probably see though (check the M30 chart), price quickly stalled following the move and began paring gains. Trade concluded with the piece closing below the H4 mid-level support logged at 1.1950.
Suggestions: For ease, let’s just recap what we have here:
• Weekly price seen within moderate range – weekly USDX shows possible selling on the cards, which could force EUR higher.
• Daily, at current price, is positioned mid-range with price likely heading higher to retest weekly resistance, thanks largely to USDX daily action pointing to the possibility of further selling.
• H4 closed sub 1.1950. Next downside target located at September’s opening level drawn from 1.1913, followed closely by the 1.19 handle.
So, with the above in mind, our team has absolutely no interest in shorting sub 1.1950.
Although both weekly and daily price suggest buys, nevertheless, traders may want to note the large psychological number 0.80 lurking above. Not only is this a watched number, but it is also bolstered by a strong-looking H4 supply just above it at 1.2029-1.2007 and a nearby H4 61.8% Fib resistance at 1.1994 taken from the high 1.2092. For that reason, we have to be prepared for a possible bounce lower from here. Why we only expect a bounce should be obvious: the higher timeframes!
To trade any bounce seen from 0.80, we would highly recommend drilling down to the lower timeframes to secure a tighter entry. This will likely help with risk/reward should price reverse before reaching 1.1950.
Data points to consider: EUR Final CPI figures y/y at 10 am GMT+1.
Weekly closing price: 1.1940
Over the past three weeks, upward momentum has somewhat diminished thanks to the weekly resistance pegged at 1.2044. Despite this, weekly bulls managed to chalk up a mild end-of-week correction last week from weekly support seen below at 1.1871, possibly encouraging buyers into the market. In addition to this, we can see that weekly price over on the USDX formed a nice-looking bearish pin bar off resistance at 11854, and shows room to move down to at least weekly support at 11687 (converges with a long-term weekly trendline support etched from the low 9322).
Since the 29th August, the daily candles have been consolidating between the noted weekly resistance level and a demand coming in at 1.1739-1.1823. Looking at the USDX daily timeframe, however, there’s a possibility that we may see further selling from resistance at 11868, as the next area of interest does not come into view until the 11681-11749 neighborhood (fuses with a channel support taken from the low 12352). As such, this could pressure the EUR up to the weekly barrier sometime this week.
A quick look at recent dealings on the H4 timeframe show US retail sales figures contracted on Friday, immediately forcing the pair higher. As you can probably see though (check the M30 chart), price quickly stalled following the move and began paring gains. Trade concluded with the piece closing below the H4 mid-level support logged at 1.1950.
Suggestions: For ease, let’s just recap what we have here:
• Weekly price seen within moderate range – weekly USDX shows possible selling on the cards, which could force EUR higher.
• Daily, at current price, is positioned mid-range with price likely heading higher to retest weekly resistance, thanks largely to USDX daily action pointing to the possibility of further selling.
• H4 closed sub 1.1950. Next downside target located at September’s opening level drawn from 1.1913, followed closely by the 1.19 handle.
So, with the above in mind, our team has absolutely no interest in shorting sub 1.1950.
Although both weekly and daily price suggest buys, nevertheless, traders may want to note the large psychological number 0.80 lurking above. Not only is this a watched number, but it is also bolstered by a strong-looking H4 supply just above it at 1.2029-1.2007 and a nearby H4 61.8% Fib resistance at 1.1994 taken from the high 1.2092. For that reason, we have to be prepared for a possible bounce lower from here. Why we only expect a bounce should be obvious: the higher timeframes!
To trade any bounce seen from 0.80, we would highly recommend drilling down to the lower timeframes to secure a tighter entry. This will likely help with risk/reward should price reverse before reaching 1.1950.
Data points to consider: EUR Final CPI figures y/y at 10 am GMT+1.
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