Shorts beyond the 1.22 handle, anyone?
Weekly gain/loss: +0.30%
Weekly closing price: 1.2214
Although the shared currency printed a fifth consecutive weekly gain last week, weekly price failed to muster enough strength to overcome a weekly broken Quasimodo line at 1.2287 that merges with two weekly trendline resistances (1.1641/1.6038). This formed a strong-looking weekly selling wick, potentially motivating candlestick traders. Should this encourage further selling this week, keep an eyeball on weekly support seen at 1.2044 and the 2018 yearly opening level drawn from 1.2004.
Daily action, on other hand, spent the week consolidating within the walls of a daily support area at 1.2246-1.2164. This is quite a notable area from a technical perspective. A violation of this zone this week may unlock downside to as far south as a daily broken Quasimodo line at 1.2070 – positioned a few pips above the noted weekly support targets. A move higher, nevertheless, has the daily broken Quasimodo line penciled in from 1.2359 to target.
A brief look at Friday’s movement on the H4 timeframe shows that the candles whipsawed through a H4 broken Quasimodo line at 1.2276 amid the London open and challenged a H4 Quasimodo resistance at 1.2296. Strong selling from this line was instant! Lower-than-expected UoM consumer sentiment was largely ignored, consequently positioning the euro a few pips ahead of the 1.22 handle going into the closing bell.
Market direction:
Weekly price indicates a potential selloff given last week’s reaction, while daily price would need to overcome the current daily support area to achieve this. Despite this, Friday’s daily selling wick, coupled with the position of weekly price, is likely going to weigh on the euro today/early this week, we believe.
A decisive H4 close beyond the 1.22 neighborhood could serve as a prospective sell signal. A retest to the underside of 1.22, followed up with a full or near-full-bodied H4 bearish candle would, in our opinion, offer a strong selling environment, targeting H4 demand at 1.2111-1.2134/1.21 handle as initial take-profit targets. The reason for requiring additional candle confirmation is simply due to the noted daily support area.
Data points to consider: Euro group meetings (all day); German Buba monthly report at 11.00am GMT.
Areas worthy of attention:
Supports: 1.2111-1.2134; 1.21 handle; 1.22 handle; 1.2044; 1.2004; 1.2070.
Resistances: 1.2287; weekly trendline resistances; 1.2276; 1.2296; 1.23 handle; 1.2359.
Weekly closing price: 1.2214
Although the shared currency printed a fifth consecutive weekly gain last week, weekly price failed to muster enough strength to overcome a weekly broken Quasimodo line at 1.2287 that merges with two weekly trendline resistances (1.1641/1.6038). This formed a strong-looking weekly selling wick, potentially motivating candlestick traders. Should this encourage further selling this week, keep an eyeball on weekly support seen at 1.2044 and the 2018 yearly opening level drawn from 1.2004.
Daily action, on other hand, spent the week consolidating within the walls of a daily support area at 1.2246-1.2164. This is quite a notable area from a technical perspective. A violation of this zone this week may unlock downside to as far south as a daily broken Quasimodo line at 1.2070 – positioned a few pips above the noted weekly support targets. A move higher, nevertheless, has the daily broken Quasimodo line penciled in from 1.2359 to target.
A brief look at Friday’s movement on the H4 timeframe shows that the candles whipsawed through a H4 broken Quasimodo line at 1.2276 amid the London open and challenged a H4 Quasimodo resistance at 1.2296. Strong selling from this line was instant! Lower-than-expected UoM consumer sentiment was largely ignored, consequently positioning the euro a few pips ahead of the 1.22 handle going into the closing bell.
Market direction:
Weekly price indicates a potential selloff given last week’s reaction, while daily price would need to overcome the current daily support area to achieve this. Despite this, Friday’s daily selling wick, coupled with the position of weekly price, is likely going to weigh on the euro today/early this week, we believe.
A decisive H4 close beyond the 1.22 neighborhood could serve as a prospective sell signal. A retest to the underside of 1.22, followed up with a full or near-full-bodied H4 bearish candle would, in our opinion, offer a strong selling environment, targeting H4 demand at 1.2111-1.2134/1.21 handle as initial take-profit targets. The reason for requiring additional candle confirmation is simply due to the noted daily support area.
Data points to consider: Euro group meetings (all day); German Buba monthly report at 11.00am GMT.
Areas worthy of attention:
Supports: 1.2111-1.2134; 1.21 handle; 1.22 handle; 1.2044; 1.2004; 1.2070.
Resistances: 1.2287; weekly trendline resistances; 1.2276; 1.2296; 1.23 handle; 1.2359.
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