Thoughts on the EUR/USD this morning...
Recent action shows that the EUR/USD extended its bounce from the 1.07 neighborhood, consequently placing the H4 candles just ahead of a H4 Quasimodo resistance level at 1.0771. The move was reinforced by daily support coming in at 1.0710, which has remained a noteworthy level since 1998! Technically speaking, however, we do not imagine price progressing much past the H4 resistance at 1.0830/1.08 handle in the days ahead. Our reasoning lies within the weekly chart. Not only is there currently a long-term trendline resistance (taken from the low 0.8231) in motion, but a few inches beyond here sits the 2016 yearly opening level at 1.0873 and resistance drawn from 1.0819.
On account of the above, our desk has chalked up a H4 sell zone between the H4 resistance at 1.0830 and the 1.08 handle (green rectangle). Sandwiched between this area is a H4 38.2% Fib resistance level at 1.0808 (stretched from the high 1.1299), as well as the above noted weekly resistance level coming in at 1.0819.
Our suggestions: Of course, we cannot rule out the possibility of the H4 Quasimodo resistance at 1.0771 holding firm today, as let’s not forget that there is a weekly trendline resistance in play right now! Be that as it may, our prime focus today will be a little higher on the curve at the aforementioned H4 sell zone. While we believe a reaction is likely to be seen from this region, traders also need to be prepared for the possibility of a fakeout higher to the yearly opening level mentioned above at 1.0873. For that reason, waiting for at least a H4 bearish close to form within the H4 sell zone before pulling the trigger is, at least in our view, the safer river to swim.
Data points to consider: EUR Minimum bid rate at 12.45pm, ECB Press conference at 1.30pm as well as the weekly US Jobless claims also at 1.30pm GMT.
Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: 1.0830/1.08 (reasonably sized H4 bearish close required prior to pulling the trigger, stop loss: ideally beyond the trigger candle).
On account of the above, our desk has chalked up a H4 sell zone between the H4 resistance at 1.0830 and the 1.08 handle (green rectangle). Sandwiched between this area is a H4 38.2% Fib resistance level at 1.0808 (stretched from the high 1.1299), as well as the above noted weekly resistance level coming in at 1.0819.
Our suggestions: Of course, we cannot rule out the possibility of the H4 Quasimodo resistance at 1.0771 holding firm today, as let’s not forget that there is a weekly trendline resistance in play right now! Be that as it may, our prime focus today will be a little higher on the curve at the aforementioned H4 sell zone. While we believe a reaction is likely to be seen from this region, traders also need to be prepared for the possibility of a fakeout higher to the yearly opening level mentioned above at 1.0873. For that reason, waiting for at least a H4 bearish close to form within the H4 sell zone before pulling the trigger is, at least in our view, the safer river to swim.
Data points to consider: EUR Minimum bid rate at 12.45pm, ECB Press conference at 1.30pm as well as the weekly US Jobless claims also at 1.30pm GMT.
Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: 1.0830/1.08 (reasonably sized H4 bearish close required prior to pulling the trigger, stop loss: ideally beyond the trigger candle).
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