The EUR is in an ideal sell zone!
Weekly gain/loss: - 3 pips
Weekly closing price: 1.1192
Over the past five weeks, we have seen the weekly candles cling to the underside of a major weekly supply at 1.1533-1.1278. Overlooking this zone is not something we’d advise considering that it has been in play since May 2015, and held price lower on several occasions since then. Should the bears eventually gain traction here, the next port of call will likely be the 2016 yearly opening level penciled in at 1.0873.
A closer look at price action on the daily timeframe shows the past five weeks of trading has been confined between a demand area coming in at 1.1075-1.1158 and a supply zone pegged at 1.1327-1.1253 (glued to the underside of the said weekly supply base).
A quick recap of Friday’s trading on the H4 chart reveals that the bulls went on the offensive from the mid-level support at 1.1150, and ended the week shaking hands with the 1.12 neighborhood. The move, as you can see, also completed a H4 AB=CD (see black arrows) 127.2% ext. at 1.1193 taken from the low 1.1119, and connected with a 50.0% retracement value at 1.1207 drawn from the high 1.1295.
Our suggestions: Given that all of the above noted H4 structures are lodged within the walls of a H4 supply zone carved from 1.1212-1.1190, and considering the position of price on the weekly chart (see above), our team believes a downside move may take place from here today. The closing candle, at least for us, is enough confirmation to sell. Therefore, depending on the open, we will short, with stops placed above H4 supply at 1.1214 and look to initially target 1.1150.
Data points to consider: German IFO business climate at 9am, ECB President Draghi speaks at 6.30pm. US durable goods orders at 1.30pm GMT+1.
Weekly closing price: 1.1192
Over the past five weeks, we have seen the weekly candles cling to the underside of a major weekly supply at 1.1533-1.1278. Overlooking this zone is not something we’d advise considering that it has been in play since May 2015, and held price lower on several occasions since then. Should the bears eventually gain traction here, the next port of call will likely be the 2016 yearly opening level penciled in at 1.0873.
A closer look at price action on the daily timeframe shows the past five weeks of trading has been confined between a demand area coming in at 1.1075-1.1158 and a supply zone pegged at 1.1327-1.1253 (glued to the underside of the said weekly supply base).
A quick recap of Friday’s trading on the H4 chart reveals that the bulls went on the offensive from the mid-level support at 1.1150, and ended the week shaking hands with the 1.12 neighborhood. The move, as you can see, also completed a H4 AB=CD (see black arrows) 127.2% ext. at 1.1193 taken from the low 1.1119, and connected with a 50.0% retracement value at 1.1207 drawn from the high 1.1295.
Our suggestions: Given that all of the above noted H4 structures are lodged within the walls of a H4 supply zone carved from 1.1212-1.1190, and considering the position of price on the weekly chart (see above), our team believes a downside move may take place from here today. The closing candle, at least for us, is enough confirmation to sell. Therefore, depending on the open, we will short, with stops placed above H4 supply at 1.1214 and look to initially target 1.1150.
Data points to consider: German IFO business climate at 9am, ECB President Draghi speaks at 6.30pm. US durable goods orders at 1.30pm GMT+1.
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